Crude Oil Weekly Outlook: Inventory Pressure and 59.7 Key levelBackdrop: The Crude Oil Narrative
The tone in crude oil has been largely defined by a tug-of-war between demand uncertainty and controlled supply. OPEC has maintained its view that global oil demand should continue growing into 2026, but at a modest pace. Despite this, the group has acknowledged noticeable inventory builds worldwide over recent months. That dynamic alone has kept sentiment cautious and has acted as a headwind for sustained rallies.
OPEC+ has also chosen to hold off on further production increases into early 2026. Instead of expanding output, the group is now focusing on capacity assessments and quota alignment among members. This shift signals discipline on the supply side, but also suggests that the group is aware of potential oversupply risk if demand fails to firm up.
Markets have been responding to this mixed backdrop. On one side, controlled supply helps prevent severe breakdowns. On the other, rising inventories and uneven demand expectations limit follow-through on the upside. As a result, price discovery has been driven less by strong directional conviction and more by rotation between value areas, bid blocks, and responsive supply zones. Recent price behavior reflects traders waiting for clearer demand signals before committing to a trend.
What the Market Has Done?
At the end of September the market sold off but found support around the 60.17 area. That initial drop appears to have been triggered by worries about economic growth and a stronger dollar undermining demand.
At the start of October sellers stepped down and held the 62.3 level, which corresponds to the Composite Value area LVN. From that zone prices continued to sell off to 56.0 by mid-October. The continued selloff seems to reflect growing bearish conviction as macro data added to demand fears and inventories remained elevated.
Buyers began to accumulate again, forming bid block 1. From there the market auctioned prices upward back to the 62.3 area where sellers were still present and defended that zone vigorously.
From the last week of October up until the third week of November offers steadily stepped down as the market grinded lower, auctioning price down back toward bid block 1. Buyers responded by stepping up bids and holding the top of bid block 1 range. Throughout the last week of November the market balanced between 59.0 and 57.3, forming bid block 2 with clear buyer accumulation in that area.
In the most recent week, the market balanced between 58.4 (roughly the midpoint of bid block 2) and 59.82 (17 November weekly VPOC). This shifted the weekly value area higher. Last Friday, the market managed a close above the previous week’s VAH, suggesting that buying strength may be gaining momentum.
What to Expect This Coming Week?
The key level to watch is 59.7, which was last week’s VAH.
Bullish scenario
If the market holds above 59.7, anticipate a possible move up toward the 61.0 area, which corresponds to a daily level 1 and the weekly 0.5 SD high.
Expect sellers to possibly defend 61.0.
If price breaks through that zone, the next target is 62.3 (Composite Low Value Area), which is confluent with the weekly 1 SD high.
Bearish scenario
If buyers cannot defend 59.7, the market could drop back through last week’s value area toward 59.0 (previous week’s VAL), confluent with the weekly 0.5 SD Low.
Expect buyers to possibly defend 59.0
Should that support fail, price could move further down toward 58.0 (24 November weekly VPOC), which is confluent with the weekly 1 SD low.
Neutral scenario
If sellers respond at the 61.0 area or if buyers step up at 58.0, the market could balance here and potentially shift value higher as buyers accumulate.
Conclusion
In summary crude oil has been trading under pressure from macroeconomic headwinds and demand concerns while finding support at key zones. The market has rotated between zones and recently shows signs of buyer strength. The key 59.7 level will likely dictate whether price heads toward 61.0 or returns toward 58.0.
What’s your outlook for Crude this week? Drop a comment and give this post a boost so more traders in the community can join the discussion! Thank you.
Disclaimer: This is not financial advice. Trade responsibly and manage your risk carefully.
