Crude Oil Technical Analysis March 4, 2025
Over the past few hours, crude oil prices have experienced a notable decline, influenced by various technical and fundamental factors. This analysis examines the current price levels, technical indicators, support and resistance levels, fundamental factors, and provides a conclusion for traders.
Current Price Levels and Technical Indicators:
As of the latest data, West Texas Intermediate (WTI) crude oil is trading near $68 per barrel, having surpassed the first negative target of $68.55 and reaching the $68.00 barrier. This decline reinforces expectations of a continued bearish trend within the descending channel observed on the charts.
Technical indicators further support this bearish outlook. The Relative Strength Index (RSI) is at 29.786, indicating oversold conditions. The Moving Average Convergence Divergence (MACD) shows a value of -0.41, suggesting increasing bearish momentum. Additionally, the Average Directional Index (ADX) stands at 50.183, reflecting a strong trend in the current market movement.
Support and Resistance Levels:
- Immediate Support: $67.05 – This level is identified as the next target within the current bearish trend.
- Secondary Support: $66.82 – Corresponding to the 76.4% Fibonacci extension level, a breach below this could signal further downside potential.
- Immediate Resistance: $68.55 – Previously a support level, it now acts as resistance following the recent price decline.
- Secondary Resistance: $70.00 – A psychological barrier and a level of previous consolidation; surpassing this could indicate a potential reversal.
Fundamental Factors:
Several fundamental factors are contributing to the current bearish sentiment in the crude oil market:
- Economic Uncertainty: Concerns about global economic growth and fuel demand have intensified due to potential U.S. tariffs and signs of economic slowdown in the United States.
- Ample Supply: Analysts anticipate that ample oil supply, coupled with a potential peace deal between Russia and Ukraine, will keep oil prices in check despite political uncertainties.
- OPEC+ Output Plans: The market is awaiting clarity on OPEC+ plans to raise oil supply starting in April, though some analysts predict a postponement to avoid price declines.
Conclusion:
Crude oil prices are currently under bearish pressure, influenced by both technical indicators and fundamental factors. The breach of key support levels and oversold technical indicators suggest the potential for further declines in the short term. Traders should closely monitor the support and resistance levels mentioned above, as movements beyond these thresholds could signal potential trading opportunities. Additionally, staying informed about geopolitical events, economic indicators, and OPEC+ decisions remains crucial for anticipating future price movements in the crude oil market.