Crude oil continues to rise but faces key technical resistance around $65-66.
Crude oil prices closed 1.10% higher on Monday, after gaining almost 2% on Friday. The market is extending its advance, reaching the highest levels since the early April tariff-related sell-off. Today, the market neared the important resistance level of around $66 – the prior medium-term lows. However, it is up only 0.4%, as the market faces more uncertainty amid trade talks and tomorrow's CPI data.
For oil markets specifically, these developments are worth monitoring:
- Oil prices climbed on Tuesday amid growing optimism about US-China trade talks potentially easing global trade tensions that have weighed on economic growth.
- Price recovery reflects improved market sentiment as demand concerns begin to fade with positive economic developments.
- OPEC oil output increased in May according to Reuters survey data, though the rise was more modest than anticipated.
- The confluence of geopolitical developments, trade negotiations, and production decisions creates a complex environment for oil price forecasting in the near term.
Daily Chart: Key $66 Level
Crude oil extended its advances on Monday and today it's trading above the $65 level. The market remains capped below key medium-term resistance at $66; however, it continues retracing its early April sell-off.
Conclusion
Crude oil is clearly within a short-term uptrend, extending Friday's and Monday's advances this morning. However, the market is nearing the important $66 resistance. No negative signals are evident at this time. Potential resistance higher is at $67-70, marked by the large daily gap down from April 3.
For now, my short-term outlook is neutral.
Here’s the breakdown:
- Crude oil prices keep advancing, nearing the $66 level today.
- However, ongoing tariff-related volatility, combined with economic data, is adding to market uncertainty.
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Thank you.
Paul Rejczak,
Stock Trading Strategist
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