Crude Oil Remains Under Steady Pressure
Crude oil markets remain under steady pressure this week as West Texas Intermediate (WTI) futures hover near $58 per barrel, extending a month-long decline driven by global trade tensions and renewed concerns over oversupply. The market narrative is once again dominated by the interplay between geopolitics and fundamentals—two forces that rarely coexist peacefully.
The latest downturn began after both the U.S. and China announced port fees on each other’s vessels, rekindling fears of a protracted trade conflict. President Trump’s threat of a 100% tariff on Chinese imports and Beijing’s retaliatory sanctions on U.S.-linked subsidiaries of a Korean shipbuilder sent ripples through global markets. These developments raised fresh doubts about demand from the world’s two largest oil consumers. Analysts now warn that sustained friction could weigh on industrial activity, transportation demand, and overall global growth—key drivers of crude consumption.
On the supply side, the International Energy Agency (IEA) delivered a bearish jolt to sentiment, projecting that global production could exceed demand by nearly four million barrels per day next year. The agency cited OPEC+ output increases and a surge in floating storage as signs that inventories may continue to climb through early 2026. Unless OPEC reins in supply, traders fear the imbalance could push WTI toward the $55 range.
Technically, crude remains in a downward trend. November WTI trades below both the 50-day ($63.10) and 200-day ($66.39) moving averages. Momentum studies paint a similar picture: RSI sits near 33 and Stochastics are deeply oversold, signaling weakness but hinting at the potential for short-term rebounds. Support is layered at $57.65 and $56.59, while resistance looms around $60.87.
Volume surged 17% above the 20-day average, showing conviction among sellers, though open interest remains stable—suggesting the market hasn’t capitulated yet. A sustained move above the $60 weekly pivot would be the first sign of stabilization, while a break below $56 could invite another leg down.
Fundamentally, oil remains caught in a tug-of-war between bearish supply signals and flickers of optimism. Treasury Secretary Bessent’s comment that U.S.–China discussions could resume helped spark a modest overnight bounce in Asia, but traders remain cautious. Any headlines suggesting diplomatic progress could trigger sharp short-covering rallies.
For now, the path of least resistance remains lower. Crude’s technical structure, combined with macro headwinds, suggests continued volatility ahead. Until OPEC+ shows production restraint or Washington and Beijing cool tensions, rallies may be short-lived and best viewed as tactical selling opportunities.
10-15-2025
Stephen Coleman
Owner & Principal, Stipelis Global Trading LLC