21 August 2025,06:22
Daily Market Analysis
21 August 2025, 06:22
Key Takeaways:
*U.S. draws highlight near-term tightness: Sharp 6M-barrel inventory decline and strong fuel demand keep crude supported despite bearish sentiment.
*Medium-term supply glut looms: IEA and EIA projections show global production growth outpacing demand into 2025–26, setting up a surplus.
*Geopolitics fuels volatility: Ukraine peace talks and tariff disputes shift sentiment daily, but structural oversupply remains the dominant risk.
Market Summary:
Crude oil prices remain trapped between near-term supply tightness and looming medium-term surplus expectations, leaving the market volatile and directionless. Recent EIA data showed a sharp 6.01 million barrel draw in U.S. inventories which is the steepest since June alongside sustained declines in gasoline stocks and a notable rebound in jet fuel demand, underscoring resilient summer consumption. These signals of physical tightness helped cushion prices after earlier losses tied to easing Russia–Ukraine tensions, which raised speculation of sanction relief and a potential return of Russian barrels to global markets.
Still, the broader outlook tilts bearish. Forecasts from the IEA and EIA point to a substantial supply overhang building into 2025–2026, with production growth far outstripping modest demand gains. OPEC+’s planned supply return later this year adds further downside risk, while the Brent futures curve is currently in backwardation and hints at eventual steep contango as storage-driven pressures emerge. On the geopolitical front, shifting headlines around Ukraine peace talks and U.S. tariff measures on India continue to inject short-term volatility, but these factors have yet to alter the dominant narrative of an impending global glut.
In the near term, crude remains supported by tightening U.S. balances and seasonal demand strength. However, the medium-term trajectory is overshadowed by expectations of surging supply and underwhelming consumption growth, leaving prices vulnerable to renewed downside once the physical tightness fades.
Technical Analysis
USOIL broke out of its recent downward channel, rebounding from the $60.15 support level and is now consolidating just below $63. The move suggests a shift in momentum after a prolonged period of selling pressure.
Momentum indicators show improving sentiment, with the RSI recovering to 55 from oversold levels and the MACD turning slightly positive, signaling early bullish traction. Price is also testing the 50-period SMA, while the 20-period average is curling higher, hinting at a potential short-term bullish crossover.
Overall, near-term bias has turned cautiously bullish, but a clear break and hold above $64.55 will be needed to confirm further upside toward $66.66. Failure to overcome this barrier risks another pullback toward the $62.70 support band.
Resistance levels: 64.55, 66.66
Support levels: 62.70, 60.15
Step into the world of trading with confidence today. Open a free PU Prime live CFD trading account now to experience real-time market action, or refine your strategies risk-free with our demo account.
This content is for educational and informational purposes only and should not be considered investment advice, a personal recommendation, or an offer to buy or sell any financial instruments.
This material has been prepared without considering any individual investment objectives, financial situations. Any references to past performance of a financial instrument, index, or investment product are not indicative of future results.
PU Prime makes no representation as to the accuracy or completeness of this content and accepts no liability for any loss or damage arising from reliance on the information provided. Trading involves risk, and you should carefully consider your investment objectives and risk tolerance before making any trading decisions. Never invest more than you can afford to lose.
Trade forex, indices, metal, and more at industry-low spreads and lightning-fast execution.
Sign up for a PU Prime Live Account with our hassle-free process.
Effortlessly fund your account with a wide range of channels and accepted currencies.
Access hundreds of instruments under market-leading trading conditions.
Trading Platforms
Learn
About PU Prime
Corporate
Please note the Website is intended for individuals residing in jurisdictions where accessing the Website is permitted by law.
Please note that PU Prime and its affiliated entities are neither established nor operating in your home jurisdiction.
By clicking the "Acknowledge" button, you confirm that you are entering this website solely based on your initiative and not as a result of any specific marketing outreach. You wish to obtain information from this website which is provided on reverse solicitation in accordance with the laws of your home jurisdiction.
Thank You for Your Acknowledgement!
Ten en cuenta que el sitio web está destinado a personas que residen en jurisdicciones donde el acceso al sitio web está permitido por la ley.
Ten en cuenta que PU Prime y sus entidades afiliadas no están establecidas ni operan en tu jurisdicción de origen.
Al hacer clic en el botón "Aceptar", confirmas que estás ingresando a este sitio web por tu propia iniciativa y no como resultado de ningún esfuerzo de marketing específico. Deseas obtener información de este sitio web que se proporciona mediante solicitud inversa de acuerdo con las leyes de tu jurisdicción de origen.
Thank You for Your Acknowledgement!
