WTI crude oil price faces downward pressure amid weak economic data and rising supply concerns
WTI crude oil tests critical support levels as global supply and demand concerns weigh on prices
WTI crude oil prices dipped below $61.5 per barrel on Monday, driven by soft economic data from China and concerns about global oversupply. Chinese industrial output and retail sales data showed signs of a slowdown, dampening expectations of a robust economic recovery.
Additionally, the U.S. downgrade by Moody's on its credit rating added to bearish sentiment. Despite these factors, oil losses were tempered by ongoing geopolitical uncertainty regarding Iran's nuclear talks, which could impact global supply.
USOIL price dynamics (April 2025 - May 2025) Source: TradingView.
Technical analysis shows mounting bearish pressure
WTI crude is currently trading around $61.20, consolidating below a resistance zone of $61.65–$62.30. The price is facing resistance from both the 100 EMA ($61.20) and the 200 EMA ($62.29) on the 4-hour chart, with recent candles indicating fading bullish momentum. The price action has been sandwiched between the middle and lower Bollinger Bands, signaling a mild bearish bias as volatility compresses.
The 30-minute RSI is hovering near 34.86, reflecting oversold conditions and building downside pressure. Additionally, the MACD has crossed below the signal line, confirming weakening bullish momentum and reinforcing the bearish outlook. A confirmed break below $60.00 could lead to further downside, with the next target at $58.40.
Looking ahead: Short-term outlook remains cautious
The near-term outlook for WTI crude remains bearish unless bulls can reclaim the 100- and 200-EMA resistance levels. For May 20–21, traders should closely watch the $60 support zone. A break below this level could trigger further selling toward $58.40. On the upside, a recovery above $61.80 may initiate a retest of the $63.00–$63.50 resistance range.
The broader market sentiment continues to reflect growing concerns over global supply and economic growth, which could keep WTI crude in a fragile state in the short term. Traders should be cautious as previously discussed of any volatility increases, especially if further geopolitical developments influence oil prices.
