WTI Price Forecast: Dives to nearly three-week low, seems vulnerable around mid-$66.00s

• WTI slumps to a multi-week low amid supply concerns, tepid global demand growth.
• The formation of a descending channel supports prospects for a further near-term fall. 
• Any attempted recovery is likely to confront stiff resistance near the $67.30 region.

West Texas Intermediate (WTI) US crude Oil prices come under heavy selling pressure on Tuesday and drop to a nearly three-week low, around mid-$66.00s during the first half of the European session.

Against the backdrop of sluggish global fuel demand growth, reports that OPEC+ is set to increase output by 180,000 barrels per day (bpd) in December overshadow fears that a widening conflict in the Middle East could curtail crude supply. This, along with some follow-through US Dollar (USD) buying, bolstered by the Federal Reserve (Fed) Chair Jerome Powell's relatively hawkish remarks on Monday, turn out to be key factors weighing on Crude Oil prices. 

From a technical perspective, the recent decline witnessed over the past three months or so, along a downward-sloping channel, points to a well-established bearish trend and supports prospects for deeper losses. Moreover, oscillators on the daily chart are holding in negative territory and are still far from being in the oversold zone. This, in turn, validates the bearish outlook and suggests that the path of least resistance for Crude Oil prices remains to the downside.

Meanwhile, some follow-through selling below the $66.00 round figure will reaffirm the negative bias and could drag the black liquid to the $65.00 psychological mark en route to the $64.75 region, or the lowest level since May 2023 touched last month. The downward trajectory could eventually drag Crude Oil prices below the $64.00 mark, towards challenging the lower boundary of the aforementioned trend-channel, currently pegged near the $63.00-$62.90 region.

On the flip side, any attempted recovery now seems to confront resistance near the $67.00 mark ahead of the $67.30 horizontal zone. A sustained strength beyond the latter might trigger a short-covering rally towards the $68.00 mark, though is more likely to remain capped near the $68.40-$68.45 region. The latter should act as a pivotal point, which if cleared could allow Crude Oil prices to reclaim the $69.00 mark and climb further towards the $7.000 psychological mark.

WTI daily chart