During the European session, WTI crude oil recovered some of its losses from the sharp drop at the start of the week, and was reported at $57.55 per barrel during the session, down 1.27%. OPEC+ unexpectedly increased production again, and WTI crude oil continued the bearish momentum that has gradually formed since March. With the increase in global supply and the rise of macro risks, the downward range of prices has reappeared. If tensions in the Middle East escalate further, it may trigger market volatility.
WTI crude oil futures opened at the lowest level since the beginning of 2021 on Monday after OPEC+ announced that it would accelerate production increases for the second consecutive month, continuing the sharp decline in April. U.S. crude oil prices fell more than 4% and Brent crude oil prices fell nearly 4%, both hitting their lowest levels since early April.
The eight core members of the organization, led by Saudi Arabia, agreed to increase production by 411,000 barrels per day in June, the same as the unexpected increase in May. The cumulative increase in production has now exceeded 800,000 barrels per day, marking an important step towards canceling the voluntary production cut target of 2.2 million barrels per day promised since 2022.
OPEC and its allies could significantly increase supply in July, August, September and October if compliance with quotas by members does not improve, sources said.
Analysts said Saudi Arabia is likely trying to force other members to comply with quotas through lower oil prices. Saudi Arabia may also try to meet U.S. President Trump's price cuts to some extent, which will help Trump fulfill his campaign promise to reduce energy costs.
Such aggressive supply increases are exacerbating concerns about growing oversupply at a time when demand concerns have resurfaced due to weak economic signals and renewed trade frictions between the United States and its major trading partners.
Geopolitical tensions pose price reversal risks
Although price movements are still mainly driven by supply factors, tensions in the Middle East are heating up. Israel vowed to retaliate after a missile fired by Yemen's Houthi rebels landed near Israel's main international airport over the weekend. Tehran warned that it would retaliate if the United States or Israel launched an attack.
For now, the geopolitical backdrop has failed to reverse the bearish tone brought about by OPEC+'s quick cancellation of previous production cuts.
DNB Markets analysts said that if OPEC+ continues to accelerate production increases, Brent crude oil prices may fall below $50 per barrel by the end of this year.
WTI is still suitable for selling on rebounds
WTI crude oil broke and closed below the $65 support level in late March, and momentum indicators such as the relative strength index (RSI, 14) and the moving average convergence divergence (MACD) are sending increasingly strong bearish signals. WTI is clearly still suitable for selling on rebounds. The evening star pattern formed in the past three weeks further reinforces this view, indicating that prices may fall in the future.
$55.12 is the first price level that shorts are watching, which is consistent with the price of the sharp rebound in futures prices in early April and today. If this price level is broken, support levels of $54, $49.33 and even $43.88 may come into play. It may take a major negative economic shock to break through these levels, which makes trade negotiations in the coming week.
On the upside, resistance could emerge just above $60 and again at $65.
USOIL USOIL USOIL USOIL
WTI crude oil futures opened at the lowest level since the beginning of 2021 on Monday after OPEC+ announced that it would accelerate production increases for the second consecutive month, continuing the sharp decline in April. U.S. crude oil prices fell more than 4% and Brent crude oil prices fell nearly 4%, both hitting their lowest levels since early April.
The eight core members of the organization, led by Saudi Arabia, agreed to increase production by 411,000 barrels per day in June, the same as the unexpected increase in May. The cumulative increase in production has now exceeded 800,000 barrels per day, marking an important step towards canceling the voluntary production cut target of 2.2 million barrels per day promised since 2022.
OPEC and its allies could significantly increase supply in July, August, September and October if compliance with quotas by members does not improve, sources said.
Analysts said Saudi Arabia is likely trying to force other members to comply with quotas through lower oil prices. Saudi Arabia may also try to meet U.S. President Trump's price cuts to some extent, which will help Trump fulfill his campaign promise to reduce energy costs.
Such aggressive supply increases are exacerbating concerns about growing oversupply at a time when demand concerns have resurfaced due to weak economic signals and renewed trade frictions between the United States and its major trading partners.
Geopolitical tensions pose price reversal risks
Although price movements are still mainly driven by supply factors, tensions in the Middle East are heating up. Israel vowed to retaliate after a missile fired by Yemen's Houthi rebels landed near Israel's main international airport over the weekend. Tehran warned that it would retaliate if the United States or Israel launched an attack.
For now, the geopolitical backdrop has failed to reverse the bearish tone brought about by OPEC+'s quick cancellation of previous production cuts.
DNB Markets analysts said that if OPEC+ continues to accelerate production increases, Brent crude oil prices may fall below $50 per barrel by the end of this year.
WTI is still suitable for selling on rebounds
WTI crude oil broke and closed below the $65 support level in late March, and momentum indicators such as the relative strength index (RSI, 14) and the moving average convergence divergence (MACD) are sending increasingly strong bearish signals. WTI is clearly still suitable for selling on rebounds. The evening star pattern formed in the past three weeks further reinforces this view, indicating that prices may fall in the future.
$55.12 is the first price level that shorts are watching, which is consistent with the price of the sharp rebound in futures prices in early April and today. If this price level is broken, support levels of $54, $49.33 and even $43.88 may come into play. It may take a major negative economic shock to break through these levels, which makes trade negotiations in the coming week.
On the upside, resistance could emerge just above $60 and again at $65.
USOIL USOIL USOIL USOIL 
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Continuously release precise trading plans to lead members to expand profits, with a stable profit of 988% every month. If you have not made a profit yet, then join us. t.me/fahsufnwks
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.