USOIL (CLUSD): Fundamental + Technical Analysis

Introduction

The global oil market has shifted dramatically over the last three years. After spiking above $130 in 2022 due to the Russia–Ukraine war, crude has since corrected as tightening financial conditions, rising supply, and fading geopolitical risks weigh on sentiment. In 2025, the market remains soft despite ongoing regional conflicts, thanks to strong global output and weaker macro momentum.

Table of Contents

1. Fundamental Drivers Impacting Oil
2. Geopolitical Easing Removes the “Fear Premium”
3. Macro Forces: Strong USD, Weak Demand Expectations
4. MRKT High-Timeframe Technical Outlook
5. Key Levels to Watch in the Coming Weeks
6. Conclusion: What Traders Should Expect Next

1. Fundamental Drivers Impacting Oil

Oil’s struggle to regain upward momentum in 2025 comes from a combination of supply-heavy conditions, easing geopolitical tensions, and a macro environment that continues to pressure commodities. Together, these forces keep crude locked in a bearish structure despite occasional corrective rebounds.

Global Supply Outpacing Demand

The primary force weighing on oil is the persistent imbalance between production and consumption. Global output remains extremely strong, with both OPEC+ and the U.S. pumping at multi-year highs. This steady rise in supply severely limits the market’s ability to fuel a sustained recovery.

Key points include:

• OPEC+ and U.S. production remain elevated, saturating the market.
• The additional 500k bpd OPEC output hike has further capped upside momentum.
• Inventory builds continue as supply consistently exceeds demand growth.
• Traders see few short-term catalysts capable of tightening market balances.

As long as this supply-heavy environment persists, rallies are likely to be short-lived and vulnerable to renewed selling pressure.

Geopolitical Easing Reduces the Risk Premium

Another major factor suppressing prices is the reduction in geopolitical risk. Several ongoing peace and stabilization processes have removed the fear-driven premium that previously supported higher prices. Instead of disruptions, the market now expects greater stability in key export regions.

Current developments include:

• Iran–Israel stabilization, reducing fears of Middle Eastern supply shocks.
• Israel–Gaza de-escalation, calming one of the previously most sensitive hotspots.
• Russia–Ukraine peace negotiations, which ease concerns about pipeline or export limitations.

With these pressures cooling, oil remains comfortably below the $65 risk premium threshold, even during volatility in broader markets.

Macro Forces: Strong USD & Weak Demand Expectations

On the macro side, crude faces additional challenges. A firm U.S. dollar, supported by expectations that the Federal Reserve may delay rate cuts, naturally weighs on commodities priced in USD. At the same time, global economic activity remains soft, with weak manufacturing numbers suppressing demand expectations.

Supporting factors:

• A stronger dollar continues to pressure crude as investors favor safer, yield-bearing assets.
• Weak industrial and manufacturing data across major economies limit consumption forecasts.
• The broader macro slowdown reinforces the bearish tilt dominating oil’s longer-term trend.

Taken together, these fundamentals strengthen the case for continued downside pressure unless supply tightens or macro conditions improve meaningfully.

4. MRKT High-Timeframe Technical Outlook

MRKT’s higher timeframe continues to signal a dominant bearish trend:

• Price structure remains broadly downward.
• A retest toward $61 is possible as part of a corrective pullback.
• Main target sits around the $55.
• A deeper break below tariff-war lows cannot be ruled out.

⚠ Can the oil prices remain below $50

Not really, below $50, many producers become unprofitable → shutdowns → supply shock → forced OPEC intervention.
This is where macro + tech meet: fundamentally unsustainable lows create future upside risks.

5. Key Levels to Watch

• $59 → major bearish structure retest (fresh seller zone)
• $61 → corrective rebound ceiling
• $50 → psychological and macro sustainability threshold
• Sub-$50 → potential supply shock rebound zone
  

6. Conclusion: What Traders Should Expect Next

Oil remains pressured by strong supply, improving global diplomacy, and a firm U.S. dollar.
Until production tightens or demand strengthens, the bearish bias holds, especially with MRKT’s higher-timeframe structure pointing toward a potential $50 retest.