WTI crude oil prices dropped to around $78.50 per barrel on Thursday after hitting a six-month high of $79.37 the day before. This decline comes despite concerns over tight supplies and falling US oil stockpiles, now at their lowest levels since April 2022, following an eight-week streak of inventory declines.
Adding to supply worries, the US expanded sanctions on Russian oil producers and tankers, forcing Russia’s buyers to look for new suppliers and pushing shipping costs. However, the US Energy Information Administration (EIA) expects oil prices to face pressure in the coming years as global production is predicted to grow faster than demand. Analysts also forecast an oversupply in the oil market by 2025, driven by slowing demand growth in significant energy consumers like the US and China.
XTIUSD – D1 Timeframe
The daily timeframe price action chart of XTIUSD shows the price inching closer to the confluence area of the trendline resistance, 88% Fibonacci retracement level, and the rally-base-drop supply zone. Based on the number of confluence factors, the odds largely favor the bears.
XTIUSD – H4 Timeframe
As the price approaches the daily timeframe trendline resistance, we see a steady constriction within the confines of a rising wedge, further increasing the chances of a bearish outcome. Considering this happens close to the 88% Fibonacci retracement level, another crucial nod favoring the bears.
Analyst’s Expectations:
- Direction: Bearish
- Target: 69.29
- Invalidation: 84.21
