Will Oil Prices Face Downward Pressure After EIA's Forecast?

Macro approach:
- The EIA’s latest short-term outlook projects weaker oil prices as rising global inventories weigh on the market. Sluggish demand growth and increased production are expected to push output above consumption, building stockpiles and adding pressure on prices.
- Traders are also monitoring the ongoing US-China trade talks in London. Sentiment remains cautiously optimistic after US Commerce Secretary Lutnick described the negotiations as progressing well.
- On the supply side, Saudi Aramco has reduced its Jul oil shipments to China by 1 million barrels compared to Jun, suggesting that the recent OPEC+ production hike may not translate into substantial new supply.

Technical approach:
- USOIL retested both the descending trendline and resistance near 64.50 before pulling back. The price remains above both EMAs, signaling that bullish momentum is still intact.
- A breakout above 64.50 and the descending trendline could open the door to 68.00–70.00.
- However, failure to clear this resistance may lead to a retreat toward the 60.00 support level.



Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness