Economic Weakness in US Weighs on Oil Prices

On Tuesday, WTI crude futures dipped below $73 per barrel, marking their fifth consecutive session of decline and reaching the lowest level in four months. Concerns regarding a potential increase in global supply later in the year contributed to the downward trend. Over the weekend, OPEC+ agreed to extend most of their supply cuts into 2025 but indicated a gradual unwinding of voluntary cuts by eight member countries starting from October. It's expected that over 500,000 barrels per day will re-enter the market by December, with a total of 1.8 million barrels per day returning by June 2025. Additionally, signs of economic weakness in the US, the world's largest oil consumer, further weighed on oil prices following a contraction in US manufacturing activity in May. Moreover, recent pressure on oil markets stems from fears that the US Federal Reserve may refrain from cutting interest rates this year, potentially leading to slower economic growth and reduced oil demand.

In the daily chart, the trend support level for oil has been approached. The initial support at this level is 72.40. If this level is breached, subsequent support levels to monitor are 71.85 and 70.65 respectively. In case of any corrective moves, the first resistance is at 74.00, with potential further resistance levels at 74.80 and 75.80 if surpassed.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
75.80	74.80	74.00	72.40	71.85	70.65