Key Points
- WTI June futures rise 0.7% to $62.84, recovering from Monday’s 2% decline.
- Brent crude trades at $66.62, up 0.5% as traders cover short positions.
- Fears over recession, Iran supply return, and Fed uncertainty continue to cloud the demand outlook.
Oil prices rebounded modestly on Tuesday, with West Texas Intermediate (WTI) June futures climbing 0.7% to $62.84, following a sharp 2% selloff in the previous session. The bounce was largely attributed to short covering as traders moved to secure profits on bearish bets amid a fragile risk environment.
Market sentiment remains cautious, with traders wary of a potential recession driven by tariff headwinds and U.S. monetary policy instability. President Trump’s renewed pressure on Fed Chair Jerome Powell to cut interest rates sparked fresh concerns over the Fed’s independence, pushing U.S. equity indices lower and the dollar index to a three-year low, further complicating the outlook for energy demand.
Meanwhile, progress in U.S.–Iran nuclear talks is tempering oil’s upside. If sanctions are eased, a return of Iranian supply could flood the market, pressuring prices. This development prompted Russia to revise its Brent price forecast down 17% for 2025, reflecting concerns of a more supply-heavy market.
Technical Analysis
Crude oil prices staged a sharp surge to $64.16 before entering a descending correction phase, pulling back toward a low of $61.77. The recovery since then has been moderate, as the price attempted to reclaim lost ground. Currently, price action hovers around $62.84, testing resistance at the short-term moving averages.
Picture: Oil prices consolidate below $63 as momentum fades, as seen on the VT Markets app
The MACD shows fading bullish momentum with the histogram turning neutral and signal lines narrowing, indicating a potential slowdown or consolidation. Meanwhile, the moving averages (5, 10, 30) are converging—suggesting a pause in directional bias unless a catalyst provides renewed momentum.
Upside resistance sits near $63.23, while support is anchored around $62.00–61.77. A break below this level could expose deeper downside risk, while a clean break above $63.20 would revive bullish sentiment.
Cautious Outlook Ahead
With WTI caught between tariff-related demand risks and Iran-related supply hopes, oil is likely to remain range-bound near the $61–$64 band in the short term. Broader direction may hinge on Fed guidance and geopolitical shifts. Weekly inventory reports from the EIA and API are next on the radar.
