Crude Prices Slide Despite OPEC Efforts

WTI Crude Oil prices (NYMEX: CL)  are extending their seven-week decline, pressured by concerns about a global economic slowdown and ample production. Despite OPEC+ cuts, oversupply fears continue to dominate the market, pushing prices down towards five-month lows. 

The bleak economic outlook in major economies, particularly China and Europe, is dampening oil demand expectations. This, coupled with high output from non-OPEC+ nations like the United States, creates a scenario of oversupply that weighs heavily on prices. 

While the recent announcement by the US government to refill its Strategic Petroleum Reserve offered some support, it wasn’t enough to offset the broader bearish sentiment. Concerns about the effectiveness of OPEC+ cuts in a global economic slowdown further exacerbate the downward pressure on prices. 

Technical Analysis 

The 4-hour chart shows that the WTI crude oil trades below key downward-sloping moving averages, suggesting a potential extension of the downtrend. However, a rising RSI hints at the possibility of short-term reversals. 

Short-term trading opportunities could exist towards the support level at the $70.39/BLL price level should the bears sustain a push lower. A break below the initial support could confirm the bearish momentum, likely bringing the $69.55/BLL and $68.81/BLL support levels into play. 

However, short-term trading opportunities could arise towards the initial resistance at $71.78/BLL should the bulls sustain a push higher. A break above the $71.78/BLL level would likely bring the $72.82/BLL resistance level into play in the short term. 


Looking forward, the trajectory of WTI Crude will depend on a delicate balance of factors, including global economic growth, OPEC+ production decisions, and the ongoing geopolitical landscape. While the short-term outlook appears bearish, longer-term prospects remain uncertain. 

Sources: TradingView, Trading Economics, EIA, OPEC+, Bloomberg, The Business Times. 

Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd, Registration number 2005/011130/07, and an Authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 2002 (FSP No. 27231). Any analysis/data/opinion contained herein are for informational purposes only and should not be considered advice or a recommendation to invest in any security. The content herein was created using proprietary strategies based on parameters that may include price, time, economic events, liquidity, risk, and macro and cyclical analysis. Securities involve a degree of risk and are volatile instruments. Market and economic conditions are subject to sudden change, which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. When trading or investing in securities or alternative products, the value of the product can increase or decrease meaning your investment can increase or decrease in value. Past performance is not an indication of future performance. Trive South Africa (Pty) Ltd, and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered from using or relying on the information contained herein. Please consider the risks involved before you trade or invest.