• Oil prices have decreased lately as a result of various crucial factors

• Technical Outlook confirms bearish structure

The global economy is encountering substantial difficulties, especially in prominent economies such as China and Europe. China's economic expansion has experienced a deceleration below initial projections, resulting in a decrease in industrial operations and a decline in oil demand. Europe has been on the brink of recession due to the disruption of energy supplies caused by the Russia-Ukraine conflict.

Despite attempts by major oil producers such as Saudi Arabia and Russia to reduce production and maintain current prices, other producers, particularly in the United States, have significantly increased their output. Recently, there has been a 5-6% surge in US oil output, resulting in an excess of supply on the market.

Although geopolitical tensions frequently cause concerns about potential supply interruptions, the current situation in the Middle East has not had a significant impact on oil supplies. However, attention has shifted towards the possibility of a cessation of hostilities in Gaza, which has contributed to the market's lack of predictability.

Despite facing sanctions and geopolitical challenges, Russia has managed to sustain a consistent level of oil output, demonstrating resilience. This resilience has effectively mitigated a substantial decrease in the global oil supply, thereby exacerbating the price slide.

The current decline in oil prices is due to a confluence of factors, including an economic downturn, heightened production levels, seasonal demand fluctuations, and geopolitical influences. These factors are anticipated to continue exerting influence on the industry in the foreseeable future.

• WTI oil battles with uptrend line
• Loses around 8% in one week

WTI crude oil prices have tumbled around 8% after the pullback off the 80.50 resistance level, taking the market well beneath the simple moving average lines and the long-term ascending trend line. If the market closes below the diagonal line, it will support the scenario of steeper decreases. The significant 72.70 support level, which has held since February, could provide immediate support.  Even a drop below the 71.30 barrier and the 70.00 round number could serve as a significant turning point.

On the other hand, a recoup of some losses and a climb above 75.20 could open the way for a retest of the SMA lines between 76.88 and 79.65. Above this area, the 80.50 resistance comes next, ahead of the medium-term downtrend line around 82.00.

According to technical oscillators, the RSI is losing momentum beneath the 50 level, while the MACD is ready for a bearish crossover with its red signal line in negative territory in the short-term view.

• WTI oil holds in symmetrical triangle in weekly chart
• Strong resistance by 200-day SMA at 78.30

Zooming in on the previous week, the bearish doji candle shows a sign for a potential downside movement, with the first support coming from the 72.70 barrier. A successful plunge beneath the uptrend line could confirm the bearish outlook, hitting the lows in May and December 2023 at 67.80. Falling further, the 64.20 barricade, registered in March 2023, could be a trigger point for traders to continue selling oil prices or be the time for an upside recovery.

Technically, the RSI is pointing down below the neutral threshold of 50, while the MACD is moving with weak momentum marginally below its trigger and zero lines.