Crude Falls with Market Sentiment, Supply Risks Persist

Key Events

U.S. Oil drops below $58 in line with an overall market pullback.
Geopolitical risks between Russia and Ukraine persist, with extended attacks on refineries, pipelines, and energy infrastructure.
The upcoming U.S. CPI report and consumer confidence data on Tuesday are expected to influence market sentiment shifts in the week ahead.

Market risk sentiment weakened throughout the previous week across indices, cryptocurrencies, and commodities, reflecting a broader pullback from record highs:

Dow Jones is down over 4.4% from its 48,427 record, holding a bearish bias below 47,000.
Nasdaq is down over 7% from its 26,300 record, maintaining a bearish bias below 25,000.
Gold is down over 8% from its $4,380 record, with a bearish bias below $4,100.
Silver is down over 7% from its $54.30 record, holding a bearish bias below $51.
Bitcoin is down over 31% from its 126,270 record, holding a bearish bias below 98,000.
Crude Oil is down over 27% from its $78.70 yearly high, maintaining a bearish bias below $60.

While crude remains pressured below the $60 mark, the $55 barrier stands as strong support — a dividing zone between an extended drawdown toward $49, and a potential bullish rebound, which could form a double-bottom reversal pattern for the year. This scenario would depend on a pickup in sentiment heading into 2026, driven by global growth expectations and oil demand recovery.

Following steep policy shifts, stretched sentiment, and elevated valuations across multiple sectors this year, momentum appears to be slowing ahead of the holidays and the new year. This presents consolidation risks across markets, unless a clean hold above key resistance levels emerges.

Crude Oil Weekly Outlook: Weekly Time Frame – Log Scale

Source: Tradingview

From a weekly perspective, the overall outlook on crude remains within a dominant downtrend since 2023, with a shorter-term trend forming from June 2025, currently stabilizing above the $55 per barrel mark.

Scenarios:

Upside: Climbing back above the upper bound of the short-term channel (June–November 2025) and above the $63 mark could open the way for a retest of the upper boundary of the broader downtrending channel that has been in place since December 2023, near $66, before confirming a structured bullish breakout.
Downside: A drop below the lower boundary of the six-month channel and the $55 yearly low is expected to extend losses toward the bottom of the original downtrend channel near $49, where another bullish rebound could emerge.

The borders of the December 2023–November 2025 channel remain dominant in defining crude’s next major directional move.

Written by Razan Hilal, CMT

Follow on X: @Rh_waves

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