WTI crude oil futures came under pressure on Wednesday, August 13, as prices approached critical support at $62.17 (the June low). Technical sentiment has clearly shifted to a bearish note. Traders are eyeing the possibility of further declines to the May 30 low of $56.91. A break below this level could trigger a more volatile sell-off, especially if prices remain capped below the 50-day moving average at $65.86.



IEA raises supply forecast, dragging down oil prices

To make matters worse, the International Energy Agency raised its supply forecast on Wednesday, citing increased output from OPEC+ producers.

At the same time, the agency lowered its global crude oil demand forecast, citing weak consumption in major economies. This rebalancing of supply and demand has tilted market sentiment towards the bearish side, with traders now pricing in weaker fundamentals for the rest of the year.

Geopolitical Watch: Traders await US-Russia talks

Markets are also closely watching the upcoming meeting between U.S. President Donald Trump and Russian President Vladimir Putin in Alaska on Friday. Although the summit will focus on the conflict between Russia and Ukraine, analysts do not expect additional sanctions on Russian crude oil.

This has exacerbated weakness in crude prices as Russian crude exports continue to flow to southern and eastern markets, according to Tamas Varga of PVM Oil.

U.S. inventory data sends mixed signals

The latest data from the American Crude Oil Institute (API) showed that U.S. crude oil inventories rose by 1.52 million barrels last week, exacerbating supply concerns. Gasoline inventories fell, while distillate inventories rose slightly.

Traders now await the official report from the U.S. Energy Information Administration (EIA) later in the day, with consensus expectations for a small draw in crude oil inventories of 300,000 barrels.

Meanwhile, the U.S. Energy Information Administration's Short-Term Energy Outlook released on Tuesday predicted that Brent crude oil prices will average less than $60 a barrel in the fourth quarter, the lowest quarterly average price since 2020.

Oil price forecast: Pressure below key technical levels and weak demand outlook


(WTI crude oil daily chart source: Yihuitong)

With prices trading below both the 200-day and 50-day moving averages and the fundamentals leaning bearish (increasing supply, weak demand, and stable Russian exports), WTI crude oil could see further downside.

Unless the price can rebound above the 50-day moving average of $65.86, the technical trend will support continued weakness in oil prices, and it is likely to fall below $60 in the short term.

Traders should watch for confirmation signals from the EIA inventory data and geopolitical developments on Friday, but for now, the market bias is bearish.

At 19:18 Beijing time, WTI crude oil was quoted at US$62.67 per barrel, down 0.79%.