1 September 2025,03:30
Daily Market Analysis
1 September 2025, 03:30
Key Takeaways:
*Oil fell under pressure as record U.S. output and surging non-OPEC supply overshadowed geopolitical risks.
*Weak Chinese PMI data reinforced demand concerns, with Brent now forecast to slip into the $60 by year-end.
*Despite Russian refinery strikes, traders are discounting disruption risks, keeping sentiment bearish ahead of OPEC+ on Sept 7.
Market Summary:
Crude oil prices traded with a negative bias as concerns over swelling supply and weakening demand overshadowed geopolitical risks. U.S. production hit a record 13.58 million barrels per day in June, while exports from non-OPEC producers such as Brazil surged to multi-year highs. Attention is now fixed on the September 7th OPEC+ meeting, where the bloc may discuss raising output further, amplifying oversupply concerns.
On the demand side, headwinds remain pronounced. China’s manufacturing PMI contracted for a fifth consecutive month, underscoring the drag from trade frictions and slowing industrial activity. Forecasts from the EIA and major banks now project Brent slipping into the low $60s by year-end, with potential declines into the $50s in 2026.
While Ukrainian strikes on Russian refineries disrupted flows and trimmed weekly Russian shipments, the geopolitical premium has faded. Traders are increasingly trading oil on fundamentals rather than disruption headlines, keeping sentiment firmly bearish in the near term.
With supply still climbing and demand faltering, oil’s recovery prospects hinge on OPEC+ signaling fresh cuts. Unless supply discipline is restored, bearish momentum looks set to persist, keeping crude vulnerable to further downside into year-end.
Technical Analysis
USOIL, H4:
USOIL has eased lower, last trading near $63.77 after failing to sustain above the $64.90 resistance zone. The recent rejection coincides with the 23.6% Fibonacci retracement at $64.35, suggesting that upside momentum is stalling. Price is now testing support at the 38.2% retracement level around $63.85, with further downside risks opening toward $63.45 and $63.00 if this floor gives way.
Momentum indicators reflect weakening bullish pressure. The Relative Strength Index (RSI) has pulled back to 48, slipping below its signal line and indicating fading buying interest. Meanwhile, the MACD is narrowing, with the histogram showing signs of a potential bearish crossover, hinting at growing downside momentum. Trading volume has also softened, underscoring the lack of conviction on the latest move higher.
Overall, the technical outlook for USOIL is turning cautious, with price action consolidating below resistance and momentum indicators shifting bearish. Traders may monitor $63.90 as the key pivot for the next directional move, with downside bias prevailing unless $64.90 is reclaimed.
Resistance level: 63.90, 64.90
Support level:63.45, 63.15
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