WTI crude oil edged lower on Thursday as traders balanced strong U.S. fuel demand against mounting global recession concerns and shifting OPEC+ production dynamics. After a sharp 2% rally on Wednesday—driven by a larger-than-expected draw in gasoline inventories—crude struggled to maintain its upward momentum amid persistent economic and trade uncertainties.
Despite solid demand fundamentals, rising crude stockpiles and geopolitical tensions have kept the market cautious. With key resistance levels in focus, traders are now looking for fresh catalysts to determine the next directional move.
Strong U.S. Fuel Demand vs. Global Economic Uncertainty
Oil markets remain caught between bullish and bearish forces, with domestic fuel consumption providing support while broader macro risks continue to weigh on sentiment.
Key Market Drivers:
- Surging gasoline demand: U.S. gasoline stockpiles fell by 5.7 million barrels last week, significantly surpassing analyst expectations of a 1.9-million-barrel draw. This signals robust consumer demand ahead of the peak driving season.
- OPEC+ production concerns: February saw an uptick in crude output, led by Kazakhstan, raising questions about OPEC’s ability to enforce production cuts.
- Trade tensions escalate: The U.S. administration has threatened new tariffs on European goods, adding to investor uncertainty and potential downside risks for oil.
Despite macro headwinds, global oil consumption remains robust. JP Morgan estimates that demand reached 102.2 million barrels per day (bpd) in March, exceeding prior forecasts by 60,000 bpd.
WTI Crude Oil Technical Analysis: Key Levels to Watch
WTI crude oil is currently trading near $67.50, facing resistance at $67.77. While bullish momentum remains intact, traders are closely watching price action for confirmation of the next major move.
Technical Outlook:
- Immediate resistance: $67.77 – A breakout here could drive prices toward $68.50 and $69.27.
- Key support: $66.71 – A break below this level may trigger a decline toward $65.67 and $64.69.
- 50-period EMA: $66.98 – This moving average is acting as a dynamic support zone, keeping bullish sentiment alive.
A decisive break above $67.77 would reinforce bullish momentum, while a failure to hold $66.71 could lead to increased selling pressure.
Market Outlook: What’s Next for Crude Oil?
Oil traders are closely watching the upcoming EIA crude inventory report, which could provide fresh direction. A larger-than-expected build in stockpiles may weaken WTI prices, while a drawdown in inventories could strengthen the bullish outlook.
Potential Scenarios for WTI Crude:
- Bullish case: A breakout above $67.77 could send oil prices toward $69.27, reinforcing upward momentum.
- Bearish case: A drop below $66.71 may open the door for a decline to $64.69, signaling renewed downside risks.
Additionally, geopolitical tensions remain a wildcard. Ukraine’s drone strikes on Russian energy infrastructure could impact global supply expectations, adding further volatility to the market.
Conclusion: Crude Oil at a Pivotal Level
WTI crude oil is at a crucial technical and fundamental juncture, with demand optimism clashing against broader economic concerns. While strong U.S. fuel consumption and global demand growth provide upside potential, rising inventories, trade risks, and geopolitical tensions could keep prices in check.
Traders should watch key resistance at $67.77 and support at $66.71 for signs of the next major move. Until a decisive breakout occurs, WTI crude remains in a make-or-break phase, requiring clear confirmation for its next trend direction.
