Crude oil faces uphill battle

Oil prices were firmer in early trade this morning. But these gains have done little to recoup losses from the pullback since Tuesday. Front-month WTI ran straight into a band of resistance between $78 and $80. Prices fell back sharply from here, although they look as if there’s some support around $76. But whether oil has found a solid base from which it can have another attempt at breaking above resistance remains to be seen. A look at the daily chart suggests that pressure remains to the downside, even as the MACD indicates an uptick in momentum from oversold levels. Could this be powerful enough to drive prices back to December lows around $68? It’s possible. Otherwise, there’s little change from yesterday. Fundamentally, it’s the outlook for future demand growth which is key. Earlier this week, the International Energy Agency (IEA), downgraded its 2025 forecast for global oil demand growth, blaming the economic slowdown in China for falling consumption. Its forecast for this year was unchanged. And while markets look forward with increasing confidence to Fed rate cuts this year and the economic boost those should provide, slowing demand from China is a worry that won’t go away.