Oil News: Crude Prices Vulnerable to Break Toward 200-Day Moving Average

Crude Oil Edges Higher But Set for Weekly Decline on Policy Uncertainty

Light crude oil futures inched higher on Friday after recovering from a two-week low. However, despite the modest rebound, oil prices remain under pressure, with both West Texas Intermediate (WTI) and Brent crude on track for weekly losses of nearly 4% and 3%, respectively. Traders remain cautious as shifting market sentiment and U.S. policy decisions cloud the outlook for crude.

At 12:00 GMT, Light Crude Oil Futures are trading $74.92, up $0.30 or +0.40%.

Technical Levels Signal Downside Risk

While the main trend in oil remains upward, momentum has turned bearish, with WTI trading below the short-term pivot of $75.47. The daily chart suggests further downside risks, with the key support zone situated near the 200-day moving average at $70.98 and the 50-day moving average at $69.99.

Analysts note that the path of least resistance appears downward, given the weakening technical momentum. A sustained recovery will require prices to regain footing above $75.47, which remains a critical resistance level in the near term.

Trump’s Energy Policies Weigh on Sentiment

Oil prices are also grappling with the impact of U.S. President Donald Trump’s recent energy policies, which emphasize boosting domestic production and reducing reliance on foreign oil. Trump declared a national energy emergency earlier in the week, rolling back environmental restrictions to promote infrastructure development and maximize domestic output.

Trump’s rhetoric toward OPEC has further pressured prices. During a speech to the World Economic Forum, he called on Saudi Arabia to lower crude prices and increase its U.S. investment package. Analysts are skeptical that OPEC will adjust its policy unless underlying market fundamentals shift significantly, keeping traders on edge as they await clarity on potential sanctions or tariff decisions.

Supply and Demand Imbalances Persist

A combination of oversupply concerns and demand-side weaknesses continues to weigh on crude. Despite a ninth consecutive weekly decline in U.S. crude inventories, with stockpiles falling by 1 million barrels to 411.7 million barrels, market sentiment remains bearish. Global demand projections, particularly from China, remain under scrutiny amid trade uncertainties and economic growth challenges.

The Energy Information Administration’s (EIA) inventory report, released a day late due to a U.S. holiday, provided only temporary support, with traders focusing on broader global supply surpluses and slowing economic momentum.

Market Outlook: Cautious Bearishness

Crude oil prices are expected to remain under pressure in the near term, with traders eyeing a potential target zone at $70.98 and $69.99 per barrel. The focus remains on upcoming U.S. trade policies and their impact on global growth and oil demand.

While temporary bullish catalysts, such as inventory drawdowns, could spur short-term rallies, the overall market sentiment leans bearish due to oversupply concerns and ailing demand projections.

A sustained move below this week’s low at $74.01 could accelerate losses, while a recovery above $75.47 is required to reignite bullish momentum.

More Information in our Economic Calendar.