WTI crude oil futures remained under pressure this week, as bearish fundamental forces overshadowed temporary bullish drivers. Despite a larger-than-expected U.S. inventory draw and de-escalating U.S.–China trade tensions, crude failed to hold gains as traders priced in persistent oversupply risks, diminishing geopolitical risk premiums, and cautious macroeconomic signals. Heading into Friday’s session, WTI is on track to post a weekly decline unless a fresh catalyst emerges.

US Crude Inventory Draws Offer Bullish Data, But Traders Shrug

A major bullish input arrived midweek when both the American Petroleum Institute (API) and the U.S. Energy Information Administration (EIA) reported sharp draws in crude and product inventories. API data pointed to a 4.02 million-barrel decline in crude stocks, while the EIA confirmed an even steeper 6.86 million-barrel draw — far above expectations. Gasoline and distillate inventories also dropped significantly.

In a vacuum, such data would normally ignite buying interest, particularly as tight product inventories suggest firm demand heading into year-end. However, price action told a different story. The market responded tepidly, underscoring the weight of broader supply concerns and signaling that short-term inventory shifts are not enough to reset sentiment.

OPEC+ Output Strategy Continues to Pressure Market Tone

Bearish pressure intensified as it became increasingly likely that OPEC+ will move forward with…

WTI crude oil futures remained under pressure this week, as bearish fundamental forces overshadowed temporary bullish drivers. Despite a larger-than-expected U.S. inventory draw and de-escalating U.S.–China trade tensions, crude failed to hold gains as traders priced in persistent oversupply risks, diminishing geopolitical risk premiums, and cautious macroeconomic signals. Heading into Friday’s session, WTI is on track to post a weekly decline unless a fresh catalyst emerges.

US Crude Inventory Draws Offer Bullish Data, But Traders Shrug

A major bullish input arrived midweek when both the American Petroleum Institute (API) and the U.S. Energy Information Administration (EIA) reported sharp draws in crude and product inventories. API data pointed to a 4.02 million-barrel decline in crude stocks, while the EIA confirmed an even steeper 6.86 million-barrel draw — far above expectations. Gasoline and distillate inventories also dropped significantly.

In a vacuum, such data would normally ignite buying interest, particularly as tight product inventories suggest firm demand heading into year-end. However, price action told a different story. The market responded tepidly, underscoring the weight of broader supply concerns and signaling that short-term inventory shifts are not enough to reset sentiment.

OPEC+ Output Strategy Continues to Pressure Market Tone

Bearish pressure intensified as it became increasingly likely that OPEC+ will move forward with an additional production increase of 137,000 barrels per day in December. This would follow a series of gradual output hikes already totaling over 2.7 million bpd since earlier this year. While not massive in isolation, the planned increase reinforces the perception that major producers are confident supply is sufficient — even in the face of subdued demand expectations.

The group’s formal decision, expected at its upcoming meeting, is being closely watched. While the market is not anticipating a reversal, any indication of restraint could offer relief. For now, the bias remains toward looser policy and an expanding supply backdrop.

Russia Sanctions Create Noise, But No Physical Tightness Yet

Earlier optimism tied to fresh U.S. sanctions on Russian oil majors quickly faded. Although some key buyers in India and China paused new purchases, analysts noted that Russian flows remain uninterrupted. Lukoil’s decision to divest international assets was the most visible response, but materially, no disruption in seaborne supply has occurred.

With Russia continuing to offer discounts and utilize shadow shipping fleets, traders are increasingly treating the sanctions as headline noise rather than a meaningful constraint. The International Energy Agency (IEA) reinforced this view, noting that ample global spare capacity continues to buffer the system against minor geopolitical disruptions.

US-China Trade Truce Seen as Symbolic, Not Structural

Markets briefly found support following a modest thaw in U.S.–China trade relations. In exchange for China resuming U.S. soybean purchases and committing to fentanyl enforcement and rare earth exports, Washington agreed to reduce tariffs for one year. While the deal was initially welcomed as a step in the right direction, it lacked depth.

Analysts characterized it as a truce rather than a turning point, and crude traders largely agreed. The absence of structural reform or long-term trade clarity meant there was little basis to revise demand forecasts materially higher. In effect, the agreement softened downside risk without generating fresh upside momentum.

Fed Rate Cut Adds Macro Support, But Momentum Is Lacking

The Federal Reserve’s quarter-point rate cut on Wednesday offered a mild boost to risk sentiment. Lower borrowing costs are typically supportive for energy demand and broader commodity markets. However, the Fed hinted this may be its final cut of the year, citing government shutdown risks and a murky fiscal outlook.

While the move aligns with a more accommodative global policy stance, especially as Europe and Japan keep rates on hold, the macro signal was not strong enough to overcome fundamental oil-specific concerns. With global GDP still struggling for traction, the impact on crude demand expectations remains limited.

Weekly Light Crude Oil Futures

Trend Indicator Analysis

Light crude oil futures are in a position to close lower for the week after failing to follow through to the upside, following last week’s dramatic closing price reversal bottom. As of Thursday’s close, the market is trading $60.57, down $0.93 or -1.51%.

On the upside, traders are facing its first major resistance level at the 52-week moving average at $62.29. Two minor resistance points come in at $62.50 and $62.59. Overcoming the latter will confirm the reversal bottom, but the market will still face headwinds at the long-term pivot at $63.74. We believe this price is the potential trigger point for an acceleration to the upside, with $65.95 the first target.

Meanwhile, the inability to overcome the 52-week moving average will indicate that bearish traders are defending against an upside breakout. This could lead to a test of a 61.8% level at $59.44. Prices could collapse to $55.96 if the Fib level fails as support.

As far as our trend indicator is concerned, we’re going to go with the 52-week moving average again. The market remains below the 52-week moving average, keeping the short-term trend bearish as we approach Friday’s open.

Weekly Technical Forecast

The direction of the Weekly Light Crude Oil Futures market the week ending November 7, 31 is likely to be determined by trader reaction to the 52-week moving average at $62.29.

Bullish Scenario

Recovering and sustaining a move over the 52-week moving average will signal the return of buyers. This move could lead to a confirmation of the previous week’s closing price reversal bottom and a bullish breakout over $63.74.

Bearish Scenario

A sustained move under the 52-week moving average will indicate the presence of sellers. This could fuel a sharp break into $59.44, while opening up the possibility of a retest of $55.96.

Fundamental Outlook: Bearish Bias Holds with Market Awaiting Fresh Catalyst

WTI crude is set to post a weekly loss heading into Friday’s session, with fundamentals offering little reason for buyers to step back in. Despite a strong U.S. inventory draw and easing trade rhetoric, the broader narrative remains centered on oversupply and policy uncertainty. OPEC+ signaling fresh output increases, and the limited impact of sanctions on Russian flows continue to weigh heavily.

Unless the market receives a clear catalyst — whether from surprise OPEC+ restraint, a meaningful shift in geopolitical posture, or a sharp improvement in demand expectations — sentiment is unlikely to shift. Traders should continue to monitor key value areas for signs of demand re-engagement, but in the absence of conviction buying, the path of least resistance remains lower.

Technically, trader reaction to the 52-week moving average at $62.29 sets the tone for the week. As of Thursday’s close, the market is on the weak side of this indicator, putting Light Crude Oil Futures in a weak or bearish position.