Crude Oil Price Outlook - Summary

In the latest analysis of the crude oil market, the light sweet crude oil has experienced a slight decline in early trading on Friday, alongside the Brent market. However, both markets are showing signs of a potential breakout.

Market Analysis

The light sweet crude oil market is currently positioned near the 50-day Exponential Moving Average (EMA) and a significant downtrend line, which have been critical indicators for traders. The market is at a pivotal point, and a breakout to the upside could target the $60 level. If prices exceed this threshold, it could signal a more interesting phase for oil trading.

Brent Market Insights

Similarly, the Brent market is attempting to break out, with a potential target of around $65. The presence of the 50-day EMA and the downtrend line suggests that traders should monitor these levels closely for any follow-through on the breakout.

Supply Dynamics

Currently, there is a structural oversupply of crude oil in the market, with the International Energy Agency (IEA) indicating an excess of approximately 3 to 4 million barrels per day. OPEC+ is working to manage its production quotas; however, non-OPEC production, particularly from the Western Hemisphere, continues to increase, which is undermining the impact of any production cuts.

Price Trends

Global inventories have been rising throughout the latter part of 2025, leading to a decline in prices. Even if there is a rally, it appears that the upside may be limited. For Brent crude, the $65 level is seen as a significant barrier, and the prevailing strategy has been to fade any rallies until a clearer trend emerges.

Conclusion

As the week closes, traders are advised to remain cautious and observant of the market's movements, particularly in light of the geopolitical risks and the ongoing supply dynamics that could influence price action in the crude oil markets.