Oil Fails to Reach the $66 LevelAs the second week of January comes to a close, oil price action has remained contained, with fluctuations of less than 2% over recent sessions. This lack of movement highlights the market’s inability to establish a clear short-term directional bias. For now, the sense of indecision has been reinforced by recent OPEC+ announcements, following the group’s meeting on February 1, which did not signal any additional increase in production levels in the near term. At the same time, confidence in demand has yet to recover, as global risk concerns have taken center stage throughout the week. Until a clearer path emerges regarding demand or production, this neutral tone is likely to continue dominating short-term price action.
The bearish trend remains in control
For several months, a downward trendline has continued to dominate average oil price movements. So far, there has been no buying pressure strong enough to challenge this structure, keeping it as the most relevant technical formation to monitor. If indecision persists and price fails to consolidate a sustained recovery, selling pressure may remain dominant in the coming sessions—particularly if oil is unable to break convincingly above the $66 per barrel area.
Technical indicators
RSI:
Although the RSI has posted readings above the neutral 50 level, the indicator has recently begun to flatten, suggesting that bullish momentum is losing strength. If this behavior continues, it could lead to a more prolonged phase of indecision in the short term.
MACD:
Meanwhile, the MACD histogram has moved closer to the zero line, indicating that the average strength of moving averages remains in balance. As long as this condition persists, price indecision is likely to remain a key feature over the next few sessions.
Key levels to watch
$66 – Key resistance:
This level aligns with recent highs and represents the main upside barrier. A sustained move above this zone, supported by bullish momentum, could challenge the longer-term bearish structure and pave the way for a renewed dominant buying phase.
$62 – Nearby barrier:
An area aligned with the 200-period simple moving average, acting as the primary neutral reference zone. Prolonged price action around this level could reinforce the current indecisive environment and favor the formation of a short-term sideways range.
$59 – Key support:
A level aligned with the 50-period simple moving average, acting as a critical downside barrier. Sustained moves below this area could reignite selling pressure and extend the prevailing downtrend in the sessions ahead.
Written by Julian Pineda, CFA, CMT – Market Analyst
