WTI crude oil price drops below $61 as Iran deal and U.S. supply build pressure outlook
WTI crude oil tests critical $60 support as Iran deal and rising U.S. stockpiles pressure market
WTI crude oil futures fell over 3% on Thursday, sinking below $61 per barrel amid renewed concerns over global oversupply. The latest downturn followed reports suggesting Iran may agree to a deal with the U.S. in exchange for sanctions relief—potentially bringing more Iranian barrels to the market.
Saudi Arabia has publicly backed the talks, fueling expectations of higher supply from the Middle East. The bearish sentiment was further reinforced by a surprise 3.4 million barrel build in U.S. crude inventories, according to EIA data, closely echoing the prior 4.3 million barrel increase reported by the American Petroleum Institute.
Adding to the weight on prices, OPEC cut its forecast for 2025 non-OPEC+ supply growth from 900,000 to 800,000 barrels per day. However, the cartel’s continued plan to raise output into the second half of the year has kept bearish pressure in play, particularly as demand growth appears slower than anticipated.
USOIL price dynamics (May 2025) Source: TradingView.
Technical breakdown extends as $60 comes into focus
From a technical perspective, WTI crude remains in a broader downtrend after failing to break above $63.50 earlier this week. The daily chart shows price action respecting a descending trendline from April highs near $73, reinforcing the bearish tone. The commodity is now hovering around $60.30–$60.40, and a decisive move below the $59.70 intraday demand pocket could trigger a deeper decline toward $56.99 or even $54.50.
On the 4-hour chart, WTI has fallen below its 20-, 50-, 100-, and 200-EMAs, while Bollinger Bands are compressing—often a precursor to high-volatility moves. The RSI on the 30-minute chart is near 31, highlighting short-term oversold conditions, but no bullish divergence has emerged. MACD remains in deep negative territory, offering little support for a recovery unless a bullish crossover confirms.
Bulls now need to reclaim $61.80 to regain short-term control. Until then, rallies are expected to face selling pressure, particularly near $62.40 and $63.80 where dynamic resistance is clustered.
As previously discussed, the technical bias for WTI crude has remained bearish since the failure to break the $64 resistance. With Iranian supply optimism and weak U.S. demand recovery weighing on sentiment, the $59.70–$60.00 zone is now critical. A breakdown here could confirm further downside in the sessions ahead.
