While there’s potential for a minor short-covering bounce, market structure remains weak. The 50-day moving average at $61.83 is below the 200-day moving average at $62.39, reinforcing a bearish setup. Until this crossover reverses, traders are likely to maintain a “sell the rally” approach, especially with no strong near-term resistance to cap gains.
Oil Prices Forecast to End Week Lower on Supply Glut Fears
WTI crude is on track for a roughly 3% weekly decline, pressured by growing concerns over global oversupply and geopolitical developments.
The International Energy Agency (IEA) this week projected a mounting oil glut into 2026, while the Energy Information Administration (EIA) reported a U.S. inventory build of 3.5 million barrels, far above analyst expectations. The build was linked to lower refinery utilization amid seasonal maintenance, while U.S. crude production hit a record 13.636 million barrels per day.
This data reinforces bearish fundamentals, as rising output and stockpiles signal waning near-term demand against persistent supply growth.
Geopolitical Shifts Could Undercut Supportive Tensions
Traders are also watching signals that U.S.-Russia relations could ease. Presidents Trump and Putin have agreed to hold a summit in Budapest within two weeks to discuss the Ukraine conflict. The move could dampen fears of escalating sanctions or disruptions in Russian oil flows, especially as Washington pressures India and China to scale back purchases.
Analysts note that Ukrainian drone strikes on Russian refineries and the risk of secondary sanctions had helped support oil prices earlier. However, if the upcoming summit softens U.S. policy, this floor may erode.
