Crude oil prices continued their decline amid expectations that OPEC+ may boost production, adding to concerns over rising global supply.
OPEC+ is considering unwinding 1.65 million barrels per day of output cuts, equivalent to about 1.6% of global demand. The cartel has already agreed to raise output by roughly 2.2 million barrels per day between April and September, alongside an additional 300,000 barrels per day increase from the UAE. The prospect of more supply is exerting downward pressure on prices.
Adding to the bearish sentiment, U.S. crude inventories rose unexpectedly. Data from the American Petroleum Institute (API) showed a build of 622,000 barrels, pointing to weaker demand and slower refinery activity.
Market attention is shifting to upcoming U.S. economic data, including jobless claims, ADP private payroll figures, and the ISM services PMI, which could provide further insight into Federal Reserve policy expectations ahead of the key nonfarm payroll report on Friday.
Signs of a slowing U.S. economy, combined with increased oil supply, suggest that prices may remain under pressure in the near term.
Technical Outlook
Oil continues to trade within a descending channel dating back to 2023 and remains below its 200-day simple moving average (SMA), confirming a bearish trend. Prices failed to break above the 50-day SMA and the $65 round number, rebounding lower with the Relative Strength Index (RSI) below 50, indicating continued selling pressure.
A sustained move below $61.45, the August low, and the $60 round number could trigger a deeper selloff toward $55.
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