Market Uncertainty tames crude oil prices within a tight band

Crude oil price has been trading within a rather tight range since early August amid geopolitical volatility and a resilient market. On Wednesday, Brent oil price rebounded above $67 per barrel after dropping by more than 2% in the previous session. However, the benchmark has remained within a $5 band for about three weeks now.  

Investors are now weighing on the impact of the heightened US tariff on Indian goods. Overall, the market sentiment hints at continued consolidation with the US Labor Day in sight. 

Market sentiment sets pace ahead of the US Labor Day

Crude oil prices remain range-bound as investors digest the higher tariffs imposed by the US on Indian goods. The levies hiked from 25% to 50% are a punishment to the Asian country for purchasing Russian crude. 

The policy that took effect on Wednesday does not appear to have a significant impact on global oil supply yet. Nonetheless, demand concerns stemming from the US-led trade war, coupled with OPEC+ agreement to unwind its voluntary cuts, continue to weigh on oil prices. 

In addition to these factors, a weaker economic outlook and increased production from non-OPEC countries hints at a glut in the near future. In fact, the International Energy Administration (IEA) expects a record surplus of 2.96 million barrels per day in 2026. 

Similarly, Goldman Sachs expects Brent crude oil price to drop to lower $50s by late next year. According to the investment bank, rising supply may yield a surplus averaging at 1.8 million bpd for the period between Q4’25 and Q4’26. 

In the near term, the market sentiment remains a key driver of oil prices. However, trading activity will likely taper off in coming sessions with the US Labor Day slated for the weekend. 

Brent crude oil price technical analysis

Crude oil price has been range-bound since early August when it plunged below its two-month-long bullish channel. A look at its daily chart shows that the asset may remain under selling pressure in the short term. 

At the time of writing, Brent oil price was at $67.15; trading below the short-term 25-day EMA and medium-term 50-day EMA. Indeed, the bearish death cross pattern that formed about three weeks ago is still in place with the 25-day MA having crossed the 50-day MA to the downside. Besides, its RSI of 47 hints at the continuation of the range-bound trading despite a potential rebound.

In the immediate term, the range between the support level at $65.90 and the resistance zone of $68 will be worth watching. Even with further rebounding, the bulls will likely lack enough momentum to retest the three-week high at $68.72. On the flip side, a pullback past the current range would activate the lower support zone of $65.