WTI Oil tests at an important level to more downturn.

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• WTI Oil tests at an important level to more downturn.
• Oil traders are seeing limited upside with US stockpile build up and tepid outlook.
• The US Dollar Index is giving up on 104.00 with pressure building on the Greenback ahead of PCE data.

Oil prices are on the backfoot and down nearly 1% in Monday’s trading with traders bracing for an eventful week when it comes to US data. On the Oil front markets will be on the lookout for any comments from key people in the Oil and broader energy complex with a big energy summit taking place this week in London. In addition, Goldman Sachs came out with a price target for Brent at $87 per barrel, confirming that more upside looks very bleak at this moment under current conditions.

Meanwhile, the US Dollar Index (DXY) is weakening a touch as well this Monday, ahead of the US data releases later this week. With the second reading of the US Gross Domestic Product (GDP) and the Personal Consumption Expenditures (PCE), markets will be able to reassess if the disinflationary path is back on track after the hiccup two weeks ago with that red hot Consumer Price Index (CPI) print. Expect a nervous US Dollar,therefore, this week which could move substantially on the back on any upbeat or downbeat surprise in the numbers.

Crude Oil (WTI) trades at $75.99 per barrel, and Brent Oil trades at $80.42 per barrel at the time of writing.

Oil prices are on the decline this Monday, continuing the sell-off from last week which erased all earlier gains. With the technical snap below the 100-day Simple Moving Average (SMA) at $76.46, the outlook for this week looks bleak. The Goldman Sachs report does not help much, despite its higher price tags for Brent, the issues outlined in the report clearly state that Oil is in no shape to soon return to $80 or higher.

Oil bulls will have a lot to deal with on the upside. First, as mentioned above, the 100-day SMA is now acting as resistance near $76.46. Further up, the chopped-up 200-day SMA at $77.62 is still worth mentioning. From there, the heavily watched $79.66, ahead of $80.00, will be a heavily fought barrier, possibly not able to crack without a substantial catalyst.

On the downside, the pivotal level near $75.27 is the first element worth mentioning. In case that does not hold, downside levels to look for are $74.26 (55-day SMA) and the ascending green trend line again near $72.93 which should act as support. That means a re-entry into the Symmetrical Triangle which has been respected since the start of 2024.

US WTI Crude Oil: Daily Chart

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