Crude oil prices continue to move within a downward channel that has persisted since 2022, reflecting ongoing market pressure and the difficulty of regaining momentum.
At present, U.S. crude (WTI) is stabilizing near $59 per barrel, weighed down by investors’ risk aversion amid growing economic uncertainty — driven by the prolonged U.S. government shutdown that began in October 2025, widespread layoffs in the artificial intelligence sector, and an overall slowdown in market activity as the year draws to a close.
A recovery in sentiment could push prices toward the $70 region, while continued weakness may lead to a test of the key support zone around $49.
Market Indicators and Sentiment Trends
Movements in the Dow Jones, Nasdaq, and S&P 500 indices indicate that caution remains dominant across the market:
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Both the S&P 500 and Nasdaq remain within upward channels that began in August.
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The Dow Jones continues to trade in an ascending channel that started in April.
This technical alignment keeps the risk-on trend in play toward year-end, but it also raises the probability of a deeper correction if prices close below key trendlines.
By the end of last week, all three indices rebounded from the lower bounds of their ascending channels, settling in mid-range zones while awaiting confirmation of a new direction.
| Index | Downside Risk Below | Upside Potential Above |
|---|---|---|
| Dow Jones | 46,400 | 47,200 |
| Nasdaq | 24,600 | 25,800 |
| S&P 500 | 6,630 | 6,770 |
These levels will play a crucial role in shaping market sentiment shifts during the week, and consequently in guiding crude oil price movements.
Technical Outlook for WTI Crude (Weekly Chart – Logarithmic Scale)
Oil prices are currently trading near the midpoint of both the three-year and five-month descending channels, making this a pivotal area in both the short and long term as uncertainty persists over supply dynamics and labor market conditions heading into 2026.
A clear breakout above $63, followed by $66.80, could pave the way for a move toward the upper boundary of the long-term channel near $70, signaling the potential start of a sustained structural recovery in prices over the coming years.
Conversely, a breakdown below $55 — marking the lower edge of the short-term channel and the yearly low — could trigger a decline toward the $49 support area, where a technical rebound may emerge once again.
