Price action suggests a modest recovery attempt, but upward momentum remains constrained. The next key resistance is at the $59.91 Fibonacci retracement level.
A break above this area could trigger short-covering rallies; however, traders remain wary of heavier resistance at the 50-day moving average at $62.53 and the 200-day moving average at $62.93.
Adding to the bearish bias, the 50-day has crossed below the 200-day — a classic technical warning of deeper weakness. On the downside, any renewed selling below $57.68 could open the door to a retest of $55.74.
IEA warns of looming supply glut
Fundamentally, bearish sentiment has been reinforced by the International Energy Agency’s (IEA) latest forecast. On Tuesday, the agency warned the global oil market could face a supply surplus of up to 4 million barrels per day in 2026 — a larger excess than previously projected — as OPEC+ and non-OPEC producers increase output while demand stagnates.
US-China tensions revive demand concerns
Geopolitical and economic risks are also pressuring sentiment. Trade tensions between the United States and China have flared in recent days, with both nations imposing additional port fees on cargo shipments.
These measures are expected to inflate freight costs, dampen economic activity, and weigh on oil demand.
