Crude Oil churns on Monday as bull run fizzles out, WTI tests below $81.00

• WTI tested back underneath $81.00 as Crude Oil markets wobble.
• Forecasts of Chinese Crude Oil demand have flipped from hopeful to fearful.
• OPEC+ production cuts set to begin ending at the end of September.

West Texas Intermediate (WTI) Crude Oil tested into the south end of the $81.00 handle on Monday as Crude Oil’s bullish break out of recent consolidation fizzles out. Barrel bids have been left within near-term consolidation levels, and global energy markets are running out of far-flung reasons to keep Crude Oil prices on the high end.

China reported a slowdown in quarterly Gross Domestic Product (GDP) growth recently, sparking fears that an upswing in Chinese Crude Oil demand, which has helped bolster Crude Oil prices through most of 2024, has given way to a feared slump in Chinese Crude Oil demand. WTI prices stopped just short of $84.00 per barrel in July before reversing direction and easing lower after it became clear that the uptick in Chinese fossil field demand markets spent over six months waiting for failed to materialize. Energy markets are now concerned that a steep decline in growth in China could cause barrel demand to fall even further.

The Organization of the Petroleum Exporting Countries (OPEC) and its extended non-member ally network, OPEC+, is still on pace to begin ending long-standing voluntary production cuts at the end of September. The production cuts, meant to prop up floundering Crude Oil prices, are facing increasingly stiff opposition within OPEC+ as the small-scale countries shouldering the burden of voluntarily pumping less Crude Oil than possible rely on market participation to balance government budgets.

WTI technical outlook

WTI US Crude Oil is back to batting the $81.00 price handle, a key inflection point, after a failed bullish break out of recent consolidation. Price action holds above the 200-day Exponential Moving Average (EMA) near $79.27, and short pressure could see an extended backslide towards early June’s bottom bids near $72.45.

WTI daily chart