This week, the pivot at $63.06 will control the short-term direction of the market.
A sustained move over this level will indicate the presence of buyers. If this creates enough upside momentum then look for a near-term surge into the 52-week moving average at $69.00. It is controlling the long-term trend which is down.
If traders push the market below $63.06 decisively then watch for a pullback into $59.67, followed by the multi-month low at $54.48.
Iran Nuclear Talks Stoke Supply Fears
Early-week selling pressure intensified after reports of “very good progress” in U.S.-Iran nuclear negotiations. The possibility of Iranian crude re-entering the global market rattled confidence, even as the U.S. simultaneously sanctioned a Chinese refiner for handling Iranian oil. Traders quickly began pricing in future barrels, despite the lack of any finalized agreement, further pressuring prices in an already sensitive market.
U.S. stockpile data added to the confusion. The API reported a large 4.6 million barrel crude draw, initially supporting bullish bets. However, official EIA figures contradicted this with a surprise crude build of 244,000 barrels. Strong draws in gasoline (-4.5 million barrels) and distillates (-2.4 million barrels) hinted at resilient end-user demand, with jet fuel deliveries hitting their highest pace since 2019. Still, the crude build was enough to reinforce broader supply concerns.
Macroeconomic Strains Erode Demand Outlook
Broader economic concerns compounded the bearish tone. The International Monetary Fund cut its U.S. growth forecast to 1.8% for 2025 and raised inflation expectations to 3%, bolstering the case for continued tight monetary policy. Recession odds were raised to 40%, casting a shadow over future oil demand and keeping risk appetite subdued across commodity markets.
