Last week, WTI crude oil futures fell by about 8%, reaching their lowest level since June 2023. This decline is driven by rising concerns over slowing economic growth in major economies such as the USA, China, and Europe, coupled with a surplus in oil supply.
Weak US jobs data and sluggish economic indicators from Europe have intensified worries about energy demand. Additionally, concerns about soft consumption and disinflation in China have compounded the situation. Bank of America has also revised its 2025 price forecast, lowering Brent crude oil‘s outlook to $75 per barrel from $80 and WTI to $71 from $75.
Saudi Aramco’s decision to cut October’s official selling prices further reflects weak demand in Asia. The diminishing prospects of a ceasefire between Hamas and Israel have also weighed on oil prices.
Supply Pressures on Oil Prices
OPEC+ had initially planned to increase production, but the decision to delay the 180,000-barrel-per-day increase until December has led to some stabilization in oil prices. However, uncertainty remains due to ongoing conflicts and potential supply disruptions from an approaching hurricane, which could affect the US Gulf Coast—a region responsible for 60% of the country’s refining capacity.
Technical Analysis of WTI Crude Oil Prices
WTI crude oil prices have fallen for four consecutive weeks, dipping below $67.74 per barrel, the low from December 2023, before finding initial support. The September low of $67.19 is slightly above the support zone of $67.10 to $66.85 observed between May and June 2023. If this support area breaks on a weekly closing basis, attention may shift to the March and May 2023 lows, and the November 2021 low between $64.41 and $62.46.
Although WTI has found support near the December 2023 low, the downtrend appears to be strong. Any recovery rally might struggle around previous support levels, now functioning as resistance, particularly between $71.49 and $72.43, due to inverse polarity. Only a significant bullish reversal and a rise above this resistance area, and ideally above the late August high of $77.56, could prompt a reassessment of the bearish outlook.