Is crude oil poised to resume its short-term uptrend?
Crude oil closed 0.56% lower on Monday, continuing its consolidation despite Moody's downgrade of the U.S. sovereign credit rating on Friday. The market remained above the $60 level, and today, prices are moving sideways again, with a slight decline of 0.3%.
For oil markets specifically, these developments are worth monitoring:
- The announcement of immediate ceasefire negotiations between Russia and Ukraine, following a call between Presidents Trump and Putin, raised expectations of increased Russian oil exports if sanctions are eased.
- Recently, U.S. President Donald Trump announced the U.S. is "very close" to securing a nuclear deal with Iran, which could potentially introduce significant additional supply to the market.
- While Chinese industrial output exceeded expectations, retail sales fell short, signaling potential weakness in demand from the world's largest oil importer.
Daily Chart: Hovering Below April Highs
Crude oil prices remain within a consolidation along their mid-April consolidation. The price action indicates caution is warranted, as the market tests key resistance levels marked by previous highs around $64.
Weekly Chart: Still Below Broken Lows
On the weekly chart, key resistance remains around $65–66, marked by previously broken lows from 2023 and 2024. This level will be crucial to watch as the market reacts to developments in the trade agreement and improving overall economic sentiment.
Conclusion
Crude oil prices continue to trade sideways amid conflicting market pressures: the potential for increased supply from Iran and rising global production are weighing on prices, while the recent U.S.-China trade agreement provided some support last week.
The key support zone around $60 remains critical for short-term price action. Oil hasn't retraced as much as stock markets, likely due to greater supply concerns.
For now, my short-term outlook is neutral.
No positions are currently justified from a risk/reward perspective
Here’s the breakdown:
- Crude oil contracts are moving sideways Moody's U.S. credit downgrade.
- Supply concerns continue to outweigh the positive sentiment from the U.S.-China tariff reduction agreement.
The full version of today’s analysis - today’s Oil Trading Alert - is bigger than what you read above, and it includes the current Crude Oil futures contract position. I encourage you to subscribe and read the details today (with a single-time 7-day free trial). Oil Trading Alerts are also a part of our Diamond Package that includes Gold Trading Alerts and Stock Trading Alerts.
And if you’re not yet on our free mailing list, I strongly encourage you to join it - you’ll stay up-to-date with our free analyses that will still put you ahead of 99% of investors that don’t have access to this information. Join our free oil newsletter today.
Thank you.
Paul Rejczak,
Stock Trading Strategist
Recommended for You
- Tax-Optimized Legacy Planning: How Physical Gold IRAs Work in 2025 Learn how forward-thinking investors are protecting generational wealth through tax-advantaged precious metals strategies that function independently of market volatility.
- Volatility Breakout System: Paul's Proprietary Trading Approach Discover how this market-tested trading system has outperformed the S&P 500 by identifying key turning points and generating precise entry signals.