The crude oil market fell under pressure, with multiple bearish prices suppressing short-term trends

On Friday (October 3), WTI crude oil futures rose slightly in the European session, slightly above the four-month low of $60.40 set on Thursday. If the price continues to decline, the downward momentum may accelerate, and then lower the low of $59.74 on May 30.

OPEC + supply talks weigh on crude oil price expectations

Crude oil prices are set for a sharp decline this week, with WTI futures down 7.5 per cent and Brent down 8.1 per cent as of Friday morning. Traders are keeping an eye on the Opec + G8, which could reach a deal this weekend to boost output by up to 411,000 barrels a day in November.

The move comes as Saudi Arabia's signal of "regaining market share" has sparked fears of a return to a crude oil glut. Demand indicators in the Atlantic basin have weakened as the summer ends, according to Rystad Energy, while impending refinery overhauls have added further downside risks to the crude market.

Analysts at JP Morgan believe that the market has been in oversupply since September and is expected to continue into the fourth quarter. This fundamental imbalance is increasingly reflected in trader sentiment. Investors who follow international crude oil prices through platforms such as ebc foreign exchange also need to be aware of the potential pressure on prices from such supply-side changes.

The Chevron refinery fire has limited impact on oil prices

A fire at Chevron's El Segundo refinery on the West Coast, one of the largest in the region with a capacity of 290,000 barrels a day, briefly sparked market attention overnight, but is not expected to have a significant impact on overall crude pricing. Local officials confirmed that the fire was contained to a local area of the plant and there was no confirmation of production disruptions.

Analysts emphasized that the West Coast of the United States is relatively isolated from the national crude oil transportation network, which minimizes the impact of the incident on WTI oil prices. Although gasoline prices in California may fluctuate slightly, PVM analyst Tamas Varga and Saxo Bank analyst Ole Hansen both played down the broader impact on the crude oil market.

Supply risks outweigh demand support, and the outlook for crude oil is bearish

The failure of WTI crude oil to recover above the key moving average, compounded by bearish technical signals, as well as OPEC + production increase expectations and weak demand, multiple factors point to further downward pressure on crude oil in the short term. Unless oil prices regain their 200-day moving average support, the overall outlook remains bearish; if they fall below $59.74, selling pressure may accelerate.

technical analysis

(WTI crude oil daily chart, source: Internet)

The price is below the downtrend line, the overall downtrend is clear, the rebound is suppressed by the trend line, and bears dominate.

There is a short-term support near 60.40 below, and if the support is effectively broken, the lower space may be further opened; positions such as 66.42 above constitute strong resistance, making it more difficult to break through the short-term rebound.

The RSI index value is relatively low and there are signs of continued decline, indicating that the market is weak and lacks upward mobility; in the MACD index, DIFF and DEA are both negative and DIFF is below DEA, the green column continues, and the bears are dominant.

For investors trading crude oil contracts on platforms such as ebc foreign exchange, these technical signals are worth watching.

Overall, U.S. crude oil continuous contracts are still facing significant downward pressure in the short term. If there are no positive factors, there is a high probability that the downward trend will continue.

At 20:14 Beijing time, WTI crude oil was reported at $60.65 per barrel, an increase of 0.28%.