Oil prices dropped for a third straight day, hitting their lowest levels in months as fears over the U.S. government shutdown weighed on the global economy. Brent oil (BCO) trades below $66 while WTI oil (CL) consolidates around $62. The shutdown raised concerns over slower growth and weaker demand, with traders already cautious about consumption trends in the U.S. and Asia.
Moreover, the outlook for supply added further pressure. The expectations that OPEC+ may raise production by up to 500,000 barrels per day in November fueled bearish sentiment.
Although OPEC denied those reports, talk of higher output combined with falling gasoline prices highlighted the risk of oversupply. U.S. shale producers also warned that prices near $60 could halt production growth, underscoring the fragile balance in the market.
The EIA reported a build of 1.792 million barrels, larger than expected, following softer exports. This surprise increase highlights concerns about excess supply at a time of shaky demand. With stocks up, OPEC+ debating output, and the U.S. shutdown hurting the outlook, oil stays weak and may hold near recent lows unless demand improves.
WTI Oil Daily Chart – Bearish Pressure
The daily chart for WTI crude oil shows that the price has broken below the $64 area after testing the 200-day SMA. This breakdown signals that prices are likely to trend lower.
However, immediate support remains at the $60 area, and a break below this level could trigger another sharp decline in oil prices. The RSI remains below the mid-level, while the price stays under the 200-day SMA, indicating further downside potential.
WTI Oil 4-Hour Chart – Consolidation with Negative Bias
The 4-hour chart for WTI crude oil shows that the price has been consolidating within the $60 to $62 range after failing to break above the $65.50 level. This indicates that oil remains in a consolidation phase with a bearish bias. A break below $60 would likely trigger a strong drop in prices.
