On Tuesday, October 14, West Texas Intermediate (WTI) crude oil futures fell more than 2%, breaking below last week's low of $58.22 and testing levels not seen since early June. Heavy selling pushed prices down to $57.68, with the May 30th bottom at $55.74 now acting as the next key support level. This move extends a sharp bearish trend, as WTI crude oil remains below its 50-day and 100-day moving averages—$62.98 and $64.11, respectively—consolidating the downward momentum.



On the upside, minor resistance lies at the Fibonacci level of $59.91. A move back above this level could slow the sell-off, but momentum remains firmly bearish as the 50-day moving average is below the 200-day moving average, reinforcing the technical pressure.

Tariff tensions hit market sentiment

The trade conflict further disrupted market sentiment, with traders remaining cautious.

UBS analyst Giovanni Stanovo noted that "risk aversion" and escalating tariff threats are clouding the demand outlook.

IEA predicts 4 million barrels per day (bpd) supply surplus in 2026, warns of weak demand

The International Energy Agency (IEA) deepened its bearish tone, predicting that the global supply surplus will reach 4 million barrels per day (bpd), almost 4% of world demand, in 2026. The agency also lowered its demand growth forecast for 2025 to 710,000 bpd, citing a weaker economic backdrop and the accelerated adoption of electrification in transportation.

Data for September showed that global oil supply surged by 5.6 million barrels year-on-year, with OPEC+ production increases accounting for 3.1 million barrels. Seaborne oil volumes also jumped by 102 million barrels last month, the largest increase since the pandemic, mainly driven by increased production in the Middle East.

OPEC contradicts IEA, but supply gains narrow forecast gap

OPEC maintains a more optimistic outlook, forecasting demand growth of 1.3 million barrels per day this year, accelerating slightly in 2026. The group expects the market to remain balanced next year, with a slight deficit of 50,000 barrels per day if current production levels remain unchanged. This view contrasts with the International Energy Agency's forecast, but the gap is narrowing as OPEC+ quickly unwinds its previous production cuts.

Bearish outlook: Rising supply and weak demand point to lower prices


(WTI crude oil daily chart source: Yihuitong)

The market bias is bearish with the break of technical support levels, increased supply from OPEC+ and non-OPEC producers, and downward revisions to demand forecasts.

Unless geopolitical tensions ease or a major demand catalyst emerges, traders should prepare for West Texas Intermediate crude to test $55.74. The narrowing and weakening backwardation further confirms the forecast of weaker oil prices in the near term.