Crude oil price analysis: Is this the start of a bearish trend?

Crude oil price began the week on a low; erasing most of the gains recorded in the previous week. Brent, the benchmark of global oil price dropped below the crucial support zone of $70 as the market grupples with demand and oversupply concerns. 

The uncertainties have been heightened by the OPEC+ decision to further unwind its voluntary output cuts in September. The production hike, coupled with Trump’s diplomatic pressure on Russia, has the oil market concerned over possible oil oversupply. At the same time,  US tariffs and worries over the country’s economy are weighing on the demand outlook.

Crude oil price breaks crucial support. What’s next?

On the one hand, crude oil price is finding support in the diplomatic pressure exerted by President Trump on OPEC+ key member, Russia. The US leader has threatened to impose secondary tariffs on the country’s oil customers if it doesn’t reach a ceasefire with Ukraine. 

Theoretically speaking, the uncertainties stemming from these threats pose an upside risk to crude oil prices. However, key Russian oil buyers, including China and India, have stated that they have no intentions of suspending their purchases. As such, the ensuing sessions will likely be marked by heightened volatility as investors seek clarity on the possible supply disruptions. 

In the event that Russia’s oil supply flow is disrupted, OPEC+ may grab the opportunity to unwind the rest of its voluntary output cuts. On Sunday, the Organization of Petroleum Exporting Countries and its allies agreed to increase production by 547,000 bpd in September. The group has been working to regain market share by hiking production. After the 411,000 bpd agreed upon for May, June, and July, OPEC+ announced an output increase of 548,000 bpd for August.  

 On the demand side, US tariffs and concerns over the health of the country’s economy are fueling the selling pressure on crude oil price. According to Goldman Sachs, these factors pose a downside risk to its forecast of 800,000 bpd average annual demand growth for the 2025-2026 period. Amid the prevailing market conditions, the investment bank maintains its forecast for Brent crude oil price at $64 in Q4’25 and $56 in 2026.   

Brent oil price technical analysis

Brent oil price extended its recent losses on Monday, moving below the bullish trendline that has offered it support for the entire month of July. At the time of writing, it was trading at $68.60 as the bulls strive to maintain it within the bullish channel. 

However, having moved below the 25 and 50-day EMAs, the bears have a chance to build on the current selling pressure. Below the crucial support zone of $68, the bears will be eyeing the lower level of $66.73.