Weekly Price Action
Crude oil futures settled the week on a soft note, closing at $57.44, down $0.16 or -0.28% for the day. For the week, the commodity saw significant selling pressure:
Weekly Change: Down -4.54%, a decline of $3.12.
The Highs: The week’s high was reached on Monday at $60.30.
The Lows: Sellers pushed the price to a weekly low of $57.01 during Thursday's trade.
The Fundamental Story
The sharp 4.5% drop this week was driven by a "perfect storm" of bearish supply data and easing geopolitical risk premiums that overpowered localized disruptions.
The Supply Glut Narrative: The primary weight on prices this week was the growing consensus of a massive supply surplus heading into 2026. The International Energy Agency (IEA) released a report forecasting a record oil glut for next year, driven by surging production from non-OPEC nations (like the U.S. and Canada) outpacing global demand.
Geopolitical Risk Fade (Ukraine): Traders began removing the "war premium" from oil prices as peace talks regarding Ukraine gained traction. Reports that the White House is sending a representative to Europe for negotiations signaled a potential de-escalation, which reduced the fear of sudden supply shocks from the region.
Production Restorations: Adding to the bearish supply picture, Iraq successfully restored production at a key oilfield that accounts for roughly 0.5% of global supply, further easing tightness in the physical market.
Limited Support from Disruptions: There were bullish factors, but they failed to turn the tide. The U.S. seized a Venezuelan oil tanker, and Ukraine struck another vessel in Russia's "shadow fleet," but market participants largely ignored these supply threats, focusing instead on the broader macro picture of oversupply.
Technical Analysis: Testing Critical Support
The price action is currently testing a critical floor on the hourly chart, focusing on a low swing area between $57.10 and $57.39. This zone is now the "line in the sand" for near-term direction.
The Bearish Scenario (Breakdown):
Trigger: Getting and staying below the $57.10 - $57.39 support zone would significantly increase the bearish bias.
Target: A confirmed break here would have traders looking toward the October low at $55.96 as the next major downside objective.
The Bullish Scenario (Hold & Bounce):
Trigger: If the price can hold support in this swing area, buyers may look to rotate back higher.
Target: The immediate upside target is $58.13.
Key Resistance: Traders must also watch the falling 100-hour moving average, currently at $58.28, which is moving quickly toward that $58.13 level and will act as a stiff ceiling for any recovery.
