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22 May 2025,03:30

Daily Market Analysis

Crude Oil Prices Retreat Amid Bearish Inventory Report

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22 May 2025, 03:30

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Key Takeaways:

*Weekly EIA reports directly affect short-term demand-supply sentiment.

*U.S.–Iran nuclear talks offer mixed signals, keeping market volatility high.

Market Summary:

Crude oil prices declined following a recent surge, primarily due to a combination of technical correction and bearish fundamentals. The retreat was driven by the latest data from the U.S. Energy Information Administration (EIA), which showed an unexpected build in crude inventories—an increase of 1.328 million barrels versus market expectations for a 0.9 million-barrel draw. This inventory surplus has raised concerns over near-term demand, contributing to selling pressure in oil markets.

In terms of geopolitics, tensions between the U.S. and Iran appear to have de-escalated slightly. News surfaced that both nations have held several rounds of discussions this year regarding Iran’s nuclear program, even as President Donald Trump reasserts sanctions on Iranian crude exports. While these developments suggest easing geopolitical risk, the broader macroeconomic environment remains volatile. Rising U.S. Treasury yields and the expanding U.S. debt burden continue to inject economic uncertainty, which may offer some underlying support to oil prices.

Technical Analysis:

Crude Oil, H4

WTI crude oil is currently trading lower after breaking below a key support level, reflecting growing bearish momentum. The MACD indicator shows an acceleration of downside momentum, while the RSI stands at 42—remaining below the midline, which indicates sustained bearish bias.

Should this momentum continue, oil prices could extend their decline toward the next major support level at $60.00. Conversely, if bearish pressure fades, a short-term rebound toward the resistance level at $62.20 may occur.

Resistance Levels: 62.20, 63.90

Support Levels: 60.00, 57.50

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