Crude oil markets continue to draw attention, with recent chart analysis highlighting a strong downtrend reinforced by momentum indicators, declining Chinese imports, and the latest US inventory data. Market participants are closely monitoring price action for potential support and resistance levels, as well as underlying economic conditions that could influence supply-demand dynamics. Below is a detailed breakdown of key levels and fundamental factors shaping current oil price movements.
High Impact Economic Events
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Chart Analysis
Crude Oil has exhibited a well-defined downward trend since its peak at $79.30 per barrel on January 15, evidenced by a succession of lower highs and lower lows. A bearish Harami candlestick pattern initially confirmed the trend reversal, signaling the end of the previous uptrend and the start of a new downtrend.
Subsequently, the emergence of a failure swing reversal pattern—where the peak at 73.29 remained below its predecessor, followed by a breakdown under 70.19—further validated the bearish trajectory. This outlook was reinforced by the 20-period Exponential Moving Average (EMA) crossing below the 50-period EMA, commonly referred to as a “Death Cross,” which underscores the prevailing downward bias. A decisive move below the 64.92 support level would likely open the way for further declines.
Momentum indicators continue to favor this bearish perspective. The Momentum Oscillator persists below the critical 100 threshold, indicating sustained selling pressure, while the Relative Strength Index (RSI) remains under 50, signaling continued downside momentum.
However, breaking above the resistance level of 67.87 could trigger a rally.
Key Resistance Levels
Should the buyers take market control, traders may direct their attention toward the four potential resistance levels below:
67.87: The initial resistance level is established at 67.87, which mirrors the high reached on March 7.
70.19: The second price target is set at 70.19, reflecting the trough marked on February 6.
73.29: The third price objective is observed at 73.29, corresponding to the peak formed on February 11.
75.01: An additional upside target is projected at 75.01, mirroring the weekly resistance, R3, estimated using the standard Pivot Points methodology.
Key Support Levels
Should the sellers maintain market control, traders may consider the four potential support levels listed below:
64.92: The initial support level is seen at 64.92, corresponding to the trough marked March 5.
62.64: The second support level is estimated at 62.64, representing the 423.6% Fibonacci Extension drawn from 71.64 to 74.42.
61.68: The third support level is identified at 61.68, reflecting the weekly support, S2, estimated using the standard Pivot Points methodology.
60.06: An additional downside target is 60.06, mirroring the 423.6% Fibonacci Extension drawn from 70.19 to 73.29.
Fundamentals
Saudi Arabia’s crude oil exports to China are projected to fall in April to their lowest level in over a year, dropping from 41 million barrels to around 35.5 million, according to trade sources. The decline is attributed partly to planned maintenance at several Sinopec-owned refineries, which will take an estimated 700,000 barrels per day of processing capacity offline from mid-March through May.
Despite the OPEC+ decision to continue raising production, China’s appetite for Saudi crude has softened in the near term due to these refinery shutdowns. Meanwhile, broader Asian crude markets are stabilizing following earlier disruptions from US sanctions on Russian and Iranian Oil, with Chinese imports of those grades poised to rebound in March as new, non-sanctioned tankers enter the trade.
On Wednesday, the US Crude Oil Inventories report showed that US refinery operations slightly increased, running at 86.5% capacity and processing 15.7 million barrels per day, while both gasoline and distillate production declined. Crude oil imports fell to 5.5 million barrels per day, and commercial crude inventories rose by 1.4 million barrels but remained below the five-year average. Gasoline, distillate, and propane stocks all decreased. Over the past four weeks, total products supplied rose to 20.7 million barrels per day, reflecting a modest uptick in demand compared to last year.
Conclusion
In conclusion, the current downtrend in crude oil prices is strongly supported by both technical indicators and recent supply-demand developments. While momentum studies point to sustained selling pressure, reduced Chinese imports and shifts in US inventories underscore broader market headwinds. Traders are closely monitoring key price levels and upcoming economic data for further indications of market direction.
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