5 September 2025,05:59
Daily Market Analysis
5 September 2025, 05:59
*U.S. crude inventories rose by 600,000 barrels vs. expectations for a 3.4M draw, fueling fresh demand concerns.
*Tariff-driven global slowdown and fragile U.S. consumption outlook weigh further on oil sentiment.
*Markets eye this weekend’s meeting, where a potential 1M+ bpd supply hike could add to downside pressure.
Oil prices retreated from a recent rally that had lifted crude nearly 7% from its August low, after U.S. government data showed an unexpected build in crude inventories. The Energy Information Administration reported a stockpile increase of more than 600,000 barrels, sharply contrasting with market expectations of a 3.4 million-barrel draw. The surprise accumulation heightened concerns over softening U.S. fuel demand, triggering a wave of selling pressure.
The bearish sentiment is further supported by a challenging macroeconomic backdrop. Since August, U.S. tariff policies have clouded the global growth outlook, raising doubts about the strength of future oil consumption. These demand-side worries are now amplified by the prospect of increased supply from OPEC+. The producer alliance is set to meet this weekend, with delegates expected to discuss raising output by more than 1 million barrels per day in a bid to reclaim market share.
In the near term, oil markets are likely to trade sideways to lower as participants await clarity from the OPEC+ meeting scheduled for Sunday. A decision to significantly increase production would likely extend losses, while a status quo outcome could offer some stability. Technical support is now being tested near the $82–$83 level for WTI; a break below could open the door to a deeper retracement.
Technical Analysis
WTI crude oil has undergone a pronounced shift in momentum, reversing sharply from its recent peak of $66.44 per barrel. The subsequent decline has been technically significant, with prices breaking below the critical 61.8% Fibonacci retracement level near $64.00—a key threshold widely monitored by traders for trend validation. This breach reinforces a deteriorating near-term outlook and suggests potential for further downside.
The breakdown is supported by weakening momentum indicators. The Relative Strength Index has declined below the 50 midline and is approaching oversold territory, reflecting strengthening selling pressure. Concurrently, the Moving Average Convergence Divergence has crossed below its zero line, confirming that bearish momentum is accelerating and that the recent correction may extend.
Resistance levels: 65.45, 67.90
Support levels: 62.60, 60.40
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