Oil News: Light Crude Futures Face Resistance—Will $67.06 Be the Next Stop?

Bearish Technical Indicators Signal Further Downside

Light crude oil futures are trading flat early Wednesday, stabilizing after a steep sell-off in the previous session. The market remains on the weak side of the short-term retracement zone between $70.35 and $72.08, establishing this range as resistance. Additionally, crude is trading below both the 200-day moving average at $70.61 and the 50-day moving average at $72.00, further signaling a bearish outlook.

The daily chart indicates a wide-open path to the downside, with the next significant support level at $67.06. The series of lower tops at $73.14, $73.65, and $75.15, coupled with lower bottoms at $71.91, $70.40, and $70.12, underscores a bearish chart pattern, reflecting traders’ inclination to sell into rallies. Unless this pattern is decisively broken, the trend remains firmly to the downside.

At 11:22 GMT, Light Crude Oil Futures are trading $69.00, up $0.07 or +0.10%.

Geopolitical Developments Weigh on Oil Prices

Oil prices are hovering near two-month lows as market sentiment is pressured by the possibility of a peace agreement between Russia and Ukraine. According to ING commodities strategists, an improving outlook for peace negotiations could lead to the lifting of Russian sanctions, easing much of the supply uncertainty that has bolstered oil prices in recent months.

A potential minerals deal between the U.S. and Ukraine could also impact the market. Sources told Reuters that the U.S. and Ukraine had agreed on draft terms for a minerals agreement, a critical component of U.S. President Donald Trump’s strategy to expedite an end to the war. Such developments are contributing to the bearish sentiment in the oil markets, as traders anticipate increased supply stability.

Mixed Inventory Data Adds to Market Uncertainty

Adding to the complex trading environment, U.S. crude stockpile data released by the American Petroleum Institute (API) indicated a draw of 640,000 barrels for the week ending February 21. Should the Energy Information Administration (EIA) confirm this later today, it would represent the first decline in inventories since mid-January. However, market analysts surveyed by Reuters expected an increase of 2.6 million barrels, setting the stage for potential volatility if the official data diverges from expectations.

Market Sentiment Pressured by Broader Economic Concerns

Beyond geopolitics, broader economic concerns continue to influence crude oil prices. The potential impact of U.S. President Trump’s tariff policies on global economic growth is dampening bullish sentiment. Despite fresh U.S. sanctions against Iran, the market remains cautious, with ANZ Bank analysts suggesting that concerns over economic headwinds are overshadowing supply-side risks.

Market Outlook: Bearish Trend Likely to Persist

The technical setup and geopolitical factors suggest a bearish outlook for light crude oil in the near term. With the market trading below key resistance levels and geopolitical developments pointing to reduced supply risks, the path of least resistance appears downward. Traders may look for potential support around $67.06, with any rally likely to face strong selling pressure unless a significant shift in market fundamentals occurs.

More Information in our Economic Calendar.