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4 June 2025,06:49

Daily Market Analysis

Oil Prices Hold Near Monthly Highs Amid Competing Market Forces

4 June 2025, 06:49

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 Key Takeaways:

*Crude oil prices remain elevated as the market forecasted better-than-expected demand ahead. 

*The oil market is closely watching the development of U.S. trade policy, which could ultimately impact oil demand.

Crude oil prices continue to trade near monthly highs around the $63.00 level, supported by improving demand fundamentals but facing headwinds from broader economic uncertainties. The market has drawn strength from recent forecasts pointing to tightening U.S. crude inventories, suggesting resilient domestic demand in the world’s largest oil consumer. This optimistic view has been further bolstered by potential supply disruptions from the ongoing Canadian wildfires, which threaten to temporarily constrain North American production.

However, the bullish case faces countervailing pressures. The OECD’s downward revision of global growth forecasts has cast doubt on the demand outlook, directly contradicting OPEC’s more optimistic projections. This fundamental divergence comes as OPEC prepares to implement its planned production increase of 400,000 barrels per day in July, adding another variable to the supply-demand equation.

Further complicating the picture, lingering uncertainty over potential U.S. tariff policies continues to weigh on market sentiment. The threat of renewed trade tensions poses a dual risk – potentially dampening economic activity while simultaneously disrupting global supply chains.

Technical Analysis:

USOIL, H4 

Crude oil prices continue to trade firmly above the $63.00 level, demonstrating resilience after completing a bullish breakout from a descending triangle pattern. This technical development marks an important shift in market structure, suggesting the potential for further upside after a period of consolidation. The ability to sustain gains at elevated levels, despite a brief retracement following the breakout, indicates underlying strength in the current uptrend.

Supporting this constructive outlook, momentum indicators continue to flash positive signals. The Relative Strength Index maintains its upward trajectory, approaching overbought territory while still leaving room for additional gains. Meanwhile, the Moving Average Convergence Divergence has rebounded decisively from the zero line, confirming that bullish momentum is gathering strength.

Resistance Levels: 64.50, 66.55

Support Levels: 62.00, 60.00

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