Crude oil prices faced another volatile week as traders balanced conflicting fundamentals. While supply-side data offered some bullish support, persistent economic concerns, escalating trade tensions, and OPEC+ production plans kept a lid on potential gains. With the market struggling to find clear direction, traders are now looking ahead to next week's key economic and inventory data for fresh catalysts.
Did Economic Concerns Keep Oil Prices in Check?
Crude oil started the week on a relatively steady note but faced headwinds from broader economic worries. The U.S. dollar weakened to fresh lows, providing some short-term support to oil prices by making crude more attractive to foreign buyers. However, this boost was tempered by lingering fears of a U.S. recession and the potential impact of trade tariffs on global demand.
Investor sentiment remained fragile as U.S. stock markets posted significant declines. The Nasdaq plunged 4%—its worst drop since 2022—while the S&P 500 also saw sharp losses. Concerns over slowing economic growth and a weakening consumer outlook weighed on risk assets, including crude oil.
Adding to the uncertainty, President Donald Trump announced a series of new tariffs on key trade partners, including a 25% duty on steel and aluminum imports from Canada. This move sparked fears of retaliatory actions that could slow global trade and energy demand. By the end of the week, markets were grappling with the question: Will economic…
Crude oil prices faced another volatile week as traders balanced conflicting fundamentals. While supply-side data offered some bullish support, persistent economic concerns, escalating trade tensions, and OPEC+ production plans kept a lid on potential gains. With the market struggling to find clear direction, traders are now looking ahead to next week's key economic and inventory data for fresh catalysts.
Did Economic Concerns Keep Oil Prices in Check?
Crude oil started the week on a relatively steady note but faced headwinds from broader economic worries. The U.S. dollar weakened to fresh lows, providing some short-term support to oil prices by making crude more attractive to foreign buyers. However, this boost was tempered by lingering fears of a U.S. recession and the potential impact of trade tariffs on global demand.
Investor sentiment remained fragile as U.S. stock markets posted significant declines. The Nasdaq plunged 4%—its worst drop since 2022—while the S&P 500 also saw sharp losses. Concerns over slowing economic growth and a weakening consumer outlook weighed on risk assets, including crude oil.
Adding to the uncertainty, President Donald Trump announced a series of new tariffs on key trade partners, including a 25% duty on steel and aluminum imports from Canada. This move sparked fears of retaliatory actions that could slow global trade and energy demand. By the end of the week, markets were grappling with the question: Will economic weakness overpower the supply-side fundamentals supporting crude?
How Is OPEC+ Responding to Price Pressures?
On the supply front, OPEC+ continued to be a key focus for traders. The group is set to increase output in April, despite concerns over recent price weakness. However, officials, including Russian Deputy Prime Minister Alexander Novak, signaled that the alliance may adjust its strategy if oil prices remain depressed for an extended period.
OPEC+ reported that Kazakhstan led a notable jump in February crude production, raising questions about compliance with agreed output levels. The group remains committed to enforcing quotas but has also indicated flexibility if market conditions deteriorate further.
Despite the planned supply boost, some analysts believe that sustained price declines could force OPEC+ to rethink its strategy. If crude remains under pressure, the group may decide to delay or even reverse production increases to prevent further downside.
Are U.S. Oil Inventories Adding More Pressure?
U.S. crude oil production remains a significant wildcard in the market. The Energy Information Administration (EIA) now projects U.S. output will reach a record 13.61 million barrels per day this year, surpassing prior estimates. This increase adds to supply-side pressures and raises concerns about potential oversupply.
Inventory data also played a key role in shaping sentiment. U.S. crude stockpiles rose by 4.2 million barrels, according to industry reports, while gasoline and distillate inventories saw a sharp decline. The draw in refined product stocks suggested firm near-term demand, but the crude build reinforced worries about excess supply.
Meanwhile, the International Energy Agency (IEA) revised its global demand forecast downward, now expecting oil consumption to grow by just 1.03 million barrels per day—70,000 barrels less than its previous projection. This revision fueled concerns that demand growth may not be strong enough to absorb rising supplies.
Weekly Light Crude Oil Futures
Trend Indicator Analysis
The main trend is up according to the weekly swing chart, however, momentum is trending lower with the market trading on the bearish side of the 52-week moving average at $71.12. This is new resistance along with a pair of pivots at $69.53 and $70.78.
The downside momentum indicates traders have their eyes on three key bottoms, $64.75, $61.58 and $59.52.
Weekly Technical Forecast
The direction of the Weekly Light Crude Oil Futures market the week ending March 21 is likely to be determined by trader reaction to $67.91.
Bullish Scenario
A sustained move over $67.91 will signal the presence of strong buyers. If this creates enough near-term momentum, we could see a possible retest of $69.53 to $70.78.
Although it won’t create a bullish scenario, per se, a steep plunge into $64.75 to $59.52 could bring in the bottom-pickers, which may fuel a strong short-covering rally. Essentially, traders looking for value may like this support area. However, we’re not going to turn outright bullish until we see a close over the 52-week moving average at $71.13.
Bearish Scenario
A sustained move under $67.91 will indicate the presence of sellers. The weekly chart indicates there is plenty of room to the downside with the first target $64.75, followed by $61.58 and $59.52.
What’s Next for Oil Prices?
Looking ahead, crude oil prices remain at a crossroads. While short-term support is evident from supply-side data, broader economic concerns and trade policy uncertainty continue to cap upside momentum.
Key factors to watch next week:
U.S. inflation data: A higher-than-expected reading could reinforce expectations of tighter monetary policy, potentially pressuring oil demand.
OPEC+ production stance: If crude prices remain weak, the group may signal flexibility in its April output plans.
U.S. crude inventories: Any significant changes in stockpiles will provide further insight into the supply-demand balance.
Market Forecast: Cautiously Bearish with Potential for Short-Term Rebounds
Given the current fundamentals, crude oil is likely to remain range-bound over the near term. Traders will continue to sell into rallies, especially if economic concerns persist. However, any unexpected geopolitical developments, supply disruptions, or OPEC+ intervention could spark short-covering rallies.
For now, the market lacks a strong bullish catalyst. Until demand signals improve or supply constraints emerge, crude oil prices will likely struggle to sustain any meaningful upside.
Technically speaking, we’re bearish overall because the market is trading on the weakside of the 52-week moving average at $71.13. At the same time, we have great respect for the $64.75 to $59.52 value zone.
That being said, we expect to see gains capped by the 50-day moving average and buyers stepping in if the market dips into $64.75 to $59.52.
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