Crude oil prices are facing strong selling pressure, having broken below the psychological $60 level yesterday to record $58.72, the lowest level since April 9, 2025. Prices are currently hovering around $60. Oil prices have declined by around 12% from the peak of $66.78 recorded on October 24 to yesterday’s low of $58.72 and are down approximately 21% since the beginning of the year.
Key factors weighing on crude oil prices:
• The possibility of reaching a peace agreement between Russia and Ukraine amid ongoing negotiations and meetings involving the United States, European countries, and Ukraine, with a noticeable increase in optimism.
• A surplus in oil supply from outside OPEC+, particularly from the United States, Canada, and Brazil.
• Weak economic data from major oil importers such as China, putting pressure on global crude demand.
• Rising volumes of Iranian, Russian, and Venezuelan oil shipments accumulated at sea.
Positive factors that could support oil prices:
• Market expectations of two U.S. interest rate cuts next year, which could help boost oil demand.
• Weakness in the U.S. dollar index, which fell to 97.87, its lowest level since October 3, 2025, providing some support to oil prices given the inverse relationship between the dollar and crude, with expectations of further dollar weakness in the coming period.
From a technical perspective, crude oil prices are currently trading below the key support level represented by the 50-day moving average at $63.19, as well as below the secondary support level at the 20-day moving average, which stands at $62.33. The next major challenge lies in the potential decline toward the $56 support level, which was last seen on February 2, 2021.
The Relative Strength Index currently stands at 37, indicating continued negative momentum in oil prices. In addition, the MACD indicator shows a bearish crossover between the MACD line and the signal line, reinforcing the likelihood that selling pressure on crude oil prices will persist.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
