Crude Oil Market Analysis:

On Wednesday（May 7）, during the Asian session, international oil prices continued to rebound but remained at their lowest levels in four years. Earlier, OPEC+ announced a further production increase of 411,000 barrels per day in June—marking the second consecutive month of expanded output—which has raised concerns in the market about potential oversupply. U.S. crude oil briefly rose 1% to $59.74 per barrel and was trading near $59.48 at the time of writing, up approximately 0.66%.

Oil prices climbed around 3% on Tuesday, supported by signs of increasing demand in Europe, a decline in U.S. production, heightened tensions in the Middle East, and a wave of buying after prices hit a four-year low the previous day. Brent crude futures rose 3.2% to close at $62.15 per barrel, while West Texas Intermediate (WTI) crude increased 3.4% to close at $59.09 per barrel. The latest production boost involves eight OPEC+ member countries. According to market surveys, OPEC+ has decided to raise output by a total of 960,000 barrels per day between April and June—equivalent to 44% of the 2.2 million barrels per day cut implemented since 2022. If member nations fail to adhere to their quotas, OPEC+ may fully abandon its voluntary production cuts by the end of October.

The Bitop market analysis team believes U.S. crude oil prices may consolidate between $59.05 and $60.21 per barrel for a day or two before resuming an upward trend, with the next target at $61.38. Key data to watch today include the “U.S. EIA crude oil inventories for the week ending May 2,” “EIA Strategic Petroleum Reserve inventories,” and any news related to “Middle East geopolitical developments.”

Crude Oil Technical Analysis:

On the daily chart, the medium-term moving average system is trending downward, indicating a bearish objective trend. After touching the low of 55.20, oil prices have shown frequent shifts between bullish and bearish momentum. This suggests that the market is accumulating bearish energy in the medium term, with potential for a further decline toward the $50 level in the longer run.

On the hourly chart, the price action shows a weak rebound pattern, which is considered a secondary movement within the broader trend. Oil prices are repeatedly crossing above and below the moving averages, indicating that the short-term objective trend has entered a consolidation phase. The MACD indicator shows both the fast and slow lines below the zero axis, signaling bearish momentum dominance. There is a risk that oil prices may retest recent lows during the day.

Overall:

Today's crude oil trading strategy is to primarily focus on selling at higher levels during rebounds, while buying on dips should be secondary. In the short term, resistance is expected around the 60.8–61.3 range, while support can be found near the 58.0–57.5 range.

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