4 September 2025,06:13
Daily Market Analysis
4 September 2025, 06:13
Key Takeaways:
*WTI crude fell 2.8% after U.S. data showed a surprise stockpile build, undermining demand outlook and ending a two-week rally.
*Markets brace for a potential 1.65 million bpd production hike, which could add pressure to already fragile prices.
*A global bond selloff and rising fiscal concerns are stoking fears of slower economic growth, weighing on oil demand sentiment.
Market Summary:
Oil prices extended declines, with West Texas Intermediate (WTI) crude falling 2.8% in the previous session and continuing lower in early trading, as a surprise build in U.S. inventories and broader risk-off sentiment fueled a sharp reversal in recent gains. The selloff marks a decisive shift in near-term momentum, breaking a two-week bullish trend.
The downturn was triggered by U.S. Energy Information Administration data, which showed an unexpected increase in crude stockpiles, contrasting sharply with market expectations of a 3.4 million-barrel draw. The build signaled potential softening in demand, unsettling a market that had been pricing in steady consumption.
Attention now turns to the upcoming OPEC+ meeting, where members are expected to discuss a potential production increase. Market speculation suggests the group could propose adding up to 1.65 million barrels per day to reclaim market share, a move that would introduce additional supply into an already balanced-to-soft fundamental outlook.
Further pressuring oil prices, a broad flight from risk assets has intensified amid growing fiscal concerns across major economies. Sovereign bonds in the U.K., France, Japan, and the U.S. have faced renewed selling pressure as investors assess elevated debt levels and weaker growth prospects, dampening the outlook for global energy demand.
WTI is now testing key technical support levels. A break below current ranges could accelerate selling toward the next major support zone, particularly if OPEC+ signals a willingness to raise output or macroeconomic concerns deepen.
Oil prices have retreated by more than 3% from their recent peak, slipping out of the uptrend channel established in the prior rally and signaling a bearish bias. The commodity is now approaching its next key support at $63.15, where a decisive break below this level could reinforce the downside momentum and validate the bearish outlook.
From a technical perspective, the RSI has slipped below the midline after easing from overbought territory, indicating a clear shift from bullish to bearish momentum. Meanwhile, the MACD is showing signs of crossing below the zero line, aligning with the bearish price action and strengthening the case for further downside pressure.
Resistance Levels: 64.85, 66.65
Support Levels: 63.15, 61.55
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