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19 August 2025,05:58

Daily Market Analysis

Crude Holds Ground, Supply Tightness Offsets Growth Fears

19 August 2025, 05:58

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Key Takeaways:

* Oil prices found support from OPEC+ discipline and tighter supply expectations, keeping downside limited despite global demand worries.
* Weak industrial data in the U.S. and soft growth elsewhere continue to weigh on consumption outlook, restraining bullish momentum.
* Crude remains caught between recession risks and supply-side support, leaving prices vulnerable to swings in macro sentiment.

Market Summary:

Crude oil prices extended their downward slide, with WTI falling to around $62.50 as supply resilience and softening demand overshadowed geopolitical risks. The Alaska summit between Trump and Putin, while billed as a high-stakes event, delivered little in the way of escalation. Trump’s decision to hold off on secondary sanctions targeting Chinese buyers of Russian oil effectively ensured Russian crude would continue flowing to global markets. Current exports remain steady at ~1.6M bpd, with China and India absorbing the bulk, reinforcing global supply despite sanctions rhetoric.

The demand side of the equation has also turned more fragile. Elevated U.S. PPI readings and weaker industrial activity (-0.1% MoM) raised fresh concerns about stagflation and potential demand destruction. Refinery utilization in the U.S. has fallen to 77.5%, signaling cooling consumption trends, while Japan’s energy use, though still up 1.7% YoY in Q2, may also slow as U.S. tariffs bite into overall economic growth. Against this backdrop, global refinery runs have begun to soften, eroding support for crude benchmarks.

Geopolitics remains a wildcard, though the immediate “war premium” in oil markets appears to have faded. The Alaska summit produced no breakthrough but eased near-term fears of escalation, with Trump touting progress on security guarantees for Ukraine while delaying the harsher sanctions measures previously threatened. 

Technical Analysis

USOIL, H4

USOIL on the chart is currently under heavy bearish pressure, trading near $62.70 after repeatedly failing to reclaim the $64.55–66.66 resistance zone. The price is moving inside a well-defined descending channel, showing consistent lower highs and lower lows, which confirms that sellers remain in control. If the downtrend continues, the next key support lies at $60.15. A break below $60 could trigger a deeper selloff toward the $57.90 zone.

Momentum indicators reinforce the bearish view. The RSI has sharply dropped to 30, entering oversold territory, suggesting the market is stretched to the downside, but also opening the door for a potential short-term rebound if buyers step in. Meanwhile, the MACD remains in negative territory, with the histogram still favoring bearish momentum, though the pace of decline looks to be stabilizing.

Resistance levels: 62.70, 64.55
Support levels: 60.15, 57.90

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