Oil prices dropped on Monday as traders focused on a looming oversupply. Brent crude oil (BCO) consolidated around $66.50 per barrel, while WTI crude oil (CL) hovered near $62.50. Despite ongoing geopolitical risks in Russia and the Middle East, the market remained fixated on rising output. Iraq increased exports and expects continued high volumes in September. Meanwhile, Kuwait reported its highest production capacity in over a decade, reaching 3.2 million barrels per day. This growing supply outlook pushed prices toward the lower end of their recent trading ranges.
Traders expect oil demand to weaken in Q4 2025 and early 2026. If China does not absorb the surplus through stockpiling, prices may decline further. The U.S. Federal Reserve’s stance also adds pressure, as officials signalled fewer rate cuts ahead, potentially limiting future economic growth and energy consumption.
Moreover, geopolitical tensions in the Middle East and Eastern Europe are influencing the oil market. Recent developments, such as the recognition of Palestine and Russian airspace violations, may add to volatility in the energy sector. Additionally, Iraq may soon resume Kurdish oil exports via Turkey, contributing further to global supply.
WTI Oil Daily Chart – Ascending Channel
The daily chart for WTI shows that the price failed to break above the 50-day SMA and continues to consolidate at the strong support of the ascending channel. Immediate support remains at the $60 level, and a break below this could trigger a decline toward the $55 region. The RSI remains below the 50 mark, indicating continued bearish pressure on oil prices.
WTI Oil 4-Hour Chart – Consolidation with Negative Bias
The 4-hour chart for WTI crude oil also shows a negative bias within a strong consolidation range. Prices are approaching the $61.60 level, and a break below this support could push WTI lower. As long as the price remains below the $70 region, the outlook for WTI crude oil is likely to remain bearish.
