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Oil prices continue to move sideways - is this still a flat correction within the downtrend?
Crude oil fell 0.63% on Monday, closing slightly above the $65 level and extending its short-term consolidation following last week’s sharp sell-off. Today, oil prices are up 0.8%, continuing their fluctuations as investors await economic data, a speech from Fed Chair Powell at 9:30 a.m., and tariff-related developments.
For oil markets specifically, these developments are worth monitoring:
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OPEC+ is expected to raise production by 411,000 barrels per day in August, continuing hikes seen in May, June, and July. If confirmed, this would bring the total 2025 output increase to 1.78 million bpd, with full normalization potentially arriving a year earlier than planned.
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Markets are watching the July 9 deadline set by President Trump for trade agreements, particularly with Japan, the EU, and other key partners. Despite ongoing talks, U.S. officials warned that sharply higher tariffs may still be imposed, raising concerns about the global demand outlook for oil.
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Analysts suggest the global oil market may enter a surplus by Q4 2025, as OPEC+ ramps up supply and geopolitical tensions ease. ING and Morgan Stanley both project a well-supplied market for the remainder of the year, with Brent possibly falling to $60 by early 2026.
Daily Chart: Fluctuating Along $65
A week ago, de-escalation in the Middle East conflict dampened bullish momentum, and crude oil prices essentially crashed from their local high near the $78 level.
Key support remains around $65, marked by previous local highs. While the market reached its highest level since January last Friday, it failed to break above the early January highs.
Weekly Chart: Pullback Below Downtrend Line
On the weekly chart, crude oil prices briefly broke above a downward trendline that has been in place for over a year and is currently around $72.50. However, the market reversed lower, negating the breakout.
Key long-term resistance remains in the $85–$90 range, while support is around $55–$60, among other levels.
Conclusion
Crude oil is still trading sideways, with volatility easing after last week’s sharp sell-off. However, the market remains highly sensitive to geopolitical headlines. Today, investors are awaiting Fed Chair Powell’s speech at 9:30 a.m., along with key economic data releases: ISM Manufacturing PMI and JOLTS Job Openings, both scheduled for 10:00 a.m.
For now, my short-term outlook is neutral.
Here’s the breakdown:
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Crude oil is still moving sideways following a sharp sell-off last week.
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The ongoing tariff-related volatility, combined with economic data, is adding to market uncertainty.
Related: Crude Chaos: How the Israel-Iran Conflict Is Fueling Oil Market Volatility