Bearish Technical Patterns Emerge as Crude Oil Continues Downward Trajectory

Oil markets retreated Thursday morning as both Brent and WTI crude futures traded lower following unexpected builds in US inventories. Brent crude fell 0.5% to $63.83 per barrel while WTI dropped to $60.53, marking a continued decline from earlier in the week.

The Energy Information Administration reported US crude stockpiles increased by 1.3 million barrels for the week ending May 16, reaching 443.2 million barrels.

Analysts had predicted a 1.3 million barrel decrease. Gasoline and distillate inventories also rose, adding to market concerns despite the approaching summer driving season. Technical indicators reveal mounting selling pressure on both benchmarks.

Brent crude trades below its 50-day EMA ($64.33) and 100-day SMA ($64.29), forming a bearish pattern on the 4-hour chart. A key rising channel has developed for WTI with critical support at $61.40, where a daily close below could trigger further declines toward $60.50.

Market participants remain cautious amid renewed Iran-US nuclear talks scheduled to begin in Rome on May 23. The negotiations present a double-edged risk – a successful agreement could increase global supply through eased sanctions, while failed talks might tighten Iranian exports and support prices.

“Traders are steering clear of substantial positions as they navigate mixed signals regarding the US-Iran nuclear negotiations,” noted an analyst from Nissan Securities Investment, who forecasts WTI prices to fluctuate between $55 and $65 near-term.

Oil Market Outlook

OPEC+ supply dynamics continue to pressure markets. The group’s decision to accelerate production increases has prompted Barclays to revise its Brent forecast downward to $67 per barrel for 2025 and $65 for 2026.

Jadwa Investment expects Saudi crude production to average 9.4 million barrels per day in 2025, up from 9 million in 2024. The market outlook remains tilted to the downside as US tariff policies create demand uncertainty while global supply appears ample.

Traders anticipate Brent prices to fluctuate around $63-$65 per barrel for the remainder of 2025 as US shale production plateaus and OPEC+ potentially slows production growth later this year.

Despite current bearish momentum, some analysts remain optimistic that the upcoming summer driving season could help deplete inventories and limit further price declines. Technical resistance for Brent sits near $67.45, while WTI faces hurdles around $64.00 and $64.50 levels.

LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.