Oil Stages 1% Comeback to $58—Trendline Holds After Brutal 20% Plunge Since April

Black gold claws back from the abyss as technical traders pounce on key support. The bounce smells more like dead-cat desperation than a real recovery—classic fossil fuel theater.

Meanwhile, crypto markets yawn and keep stacking SATs while legacy energy plays musical chairs. At least oil’s volatility is predictable: drill, crash, repeat.

Mixed Fundamentals

While the rally is good for bulls, fundamentals are still cloudy. Analysts like Yeap Jun Rong at IG say the price recovery is more technical than demand driven. “Persistent headwinds like OPEC+ output, tariff driven demand risks and weaker forecasts are still weighing on oil,” he said.

Chinese market reopened after 5 day holiday and demand picked up with traders in the world’s largest crude importer buying up cheaper barrels. US services PMI surprised to the upside at 51.6 in April vs 50.2 expectations. Oil demand looks resilient.

But Barclays cut its Brent forecast by $4 to $70 for 2025 citing a “rocky road” ahead due to geopolitical tensions and supply pressures. Fed is also expected to keep rates on hold this week as economic uncertainty mounts and that will add to the oil outlook.

Trade Setup: Breakout or Bull Trap?

From a technical perspective, WTI is testing the $58.08 level which is a key resistance. 50 period EMA is now the NEAR term support and MACD has turned positive.

Here’s the setup:

• Entry: Buy above $58.08 on strong volume

• Targets: $59.77 (swing high) and $60.58 (major resistance)

• Stop-loss: Just below $57.50 to manage risk

Breakout or bull trap?

Summary Bullet Points:

• Oil rebounds 1% after touching February 2021 lows

• OPEC+ output hike adds pressure despite short-term dip buying

• WTI tests $58.83 resistance amid bullish MACD crossover

• Barclays cuts forecast for 2025 Brent to $70 per barrel

• Breakout setup forming, but trendline remains unbroken