From a chart perspective, bulls are eyeing a breakout above both the 200-day and the 50-day moving averages — the latter sitting up at $65.70 — as confirmation that momentum has actually flipped. Getting above $64.06 opens the door for a quick run through the 50% retracement level at $65.38, but if buyers can’t hold that ground, it’ll just invite more selling. Bottom line: this market needs a close above $65.70 to really attract fresh longs.
Geopolitics Stir Nerves as Trump-Putin Summit Looms
What weighed on crude Friday wasn’t just technical rejection — traders were clearly on edge ahead of the Trump-Putin summit in Alaska. There’s talk of a possible ceasefire in Ukraine, and if that materializes, it could drag crude lower in the near term. The market sees peace talks as bearish because it raises the odds of easing sanctions on Russian oil, which would effectively bring more barrels to market.
That being said, the situation remains fluid. Trump’s also threatening secondary sanctions on countries like India and China if no deal is reached — so there’s still headline risk in both directions. For now, though, the smart money is clearly taking a cautious stance heading into the weekend.
China Demand Questions Add to Bearish Pressure
Weaker-than-expected Chinese economic data didn’t help sentiment either. Factory output growth and retail sales came in soft, fueling worries about underlying demand from the world’s second-largest oil consumer. Yes, refinery throughput was up nearly 9% year-over-year in July, but the month-on-month slowdown — along with higher product exports — suggests domestic fuel demand might be leveling off.
Surplus Warnings, Rig Count Tick Higher
On the supply side, bears got more ammo this week. Bank of America widened its oil surplus forecast, now projecting a nearly 900,000 bpd overhang stretching into mid-2026, citing rising OPEC+ output. The IEA also echoed similar concerns, calling the market “bloated.” And while one rig doesn’t make a trend, the Baker Hughes oil rig count rose by one to 412 — another small signal that U.S. supply isn’t going away.
Oil Prices Forecast: Downside Risks Building
With resistance at $64.06 holding firm and no real bullish catalyst in sight, the bias for crude oil leans lower — at least near term. A break below $61.94 could trigger stops and accelerate the selling. Unless prices can firmly clear $65.70, we’re likely stuck in a consolidation range with downside risk. So, look at pullbacks cautiously — this market may need more time (and news) to set up a real move either way.
