Crude Oil Weekly Outlook: The Consolidation Extends

Key Events This Week:

• Flash Manufacturing and Services PMIs across the EU, UK, and US on Tuesday
• Crude inventories dropped by 9.3 million barrels, yet WTI pulled back to $62
• Trump signaled intent to defend Poland should Russian escalations continue

According to Mia Gindis, oil markets reporter at Bloomberg, hedge funds turned bullish on oil at the fastest pace in three months, as geopolitical unrest in key oil-producing regions has revived the risk premium in crude prices.

Ongoing Russian oil sanctions, airspace violations involving Poland prompting U.S. involvement, and increasing unrest in the Middle East, particularly between Israel and Iranian proxies, have all contributed to renewed upside pressure on crude, as markets transition from summer demand into the winter heating season.

Meanwhile, OPEC’s gradual unwinding of supply cuts, though occurring at a slower pace, may be weighing on oil prices, especially when combined with tariff concerns and the U.S. dollar’s rebound from a critical 17-year support level.

Since the June 2025 breakout of the Israel-Iran conflict, the overall price action in crude has taken the form of a bearish consolidation, holding above $61 support and facing resistance at $64.50 as of September 19, 2025.

The longer this consolidation persists, the stronger the eventual breakout may be. Market sentiment currently leans bullish, supported by rate cut momentum and ongoing sanctions.

However, a sustained breakout will likely require a fundamental catalyst and a clean hold above the $64 barrier to confirm directional continuation.

Technical Analysis Quantifying Uncertainties

Crude Oil Weekly Time Frame – Log Scale

Source: Tradingview

Crude oil’s consolidation maintains a bearish structure overall, as the Relative Strength Index (RSI) remains below the 50 neutral level, and price action continues to trade within the boundaries of a three-year down-trending channel extending from the 2022 peaks.

However, from a short-term perspective, bullish momentum could drive prices back toward the yearly highs if a clear hold above $64 is achieved, testing the borders of the three-year channel.

Key Levels in Sight:

• A clean hold above $64.50 may extend gains toward $66.00, $67.80, and $70.00 — the upper boundary of the descending channel
• From the downside, a clean break below $61 may extend declines toward the 2025 lows, aligning with $60.20, $59.20, and $57.90

Crude Oil Weekly Time Frame – Log Scale

Source: Tradingview

Consolidations are generally considered neutral patterns until a decisive breakout occurs in either direction. The broader structure, the three-year down trending channel, remains a key framework for determining crude oil’s short- and long-term direction until a clear break is confirmed.

Written by Razan Hilal, CMT

Follow on X: @RH_waves