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2025 Crude Oil Outlook Technical Preview

Yesterday 5:00 PM

 

This is an excerpt from our full 2025 Crude Oil Outlook report, one of nine detailed reports about what to expect in the coming year.

Technical Analysis: Quantifying Uncertainties

Crude Oil 3 Month Outlook – Log Scale

Source: Tradingview

Starting with crude oil's ascending channel, which extends from the historical lows of the 1800s, the respected Fibonacci channel ratios highlight oil's 2023–2024 range, constrained between the 0.786 Fibonacci support and the 0.618 resistance. In simpler terms, oil prices have maintained a range between the $64 support and the $90 resistance zones.

As 2024 concludes, prices are testing the 0.786 support level, with downside risks looming. A firm break below $64 could trigger a decline toward the channel's lower border, a zone between $49 and $43, which has only been breached during the COVID-19 collapse.

On the upside, the $90 resistance remains a critical level, followed by the 2023 high at $95. A breakout above these levels could pave the way toward the next resistance at $120, aligning with the 50% Fibonacci retracement and the mid-channel level. Such a surge would likely require a scenario of improved demand outlook and supply disruptions followed by geopolitical conflicts to materialize.

 

Crude Oil Weekly Outlook – Log Scale

Source: Tradingview

From a weekly perspective, the chart is structured as follows:

  • Uptrend from 2020 to 2022
  • Retracement between 2022 and 2023
  • Consolidation/sideways pattern from 2023 to 2024

The current consolidation is holding above the 50% Fibonacci retracement of the 2020–2022 uptrend. However, bearish risks are increasing following a downside breakout from the yearlong triangle pattern. A minor consolidation has also emerged below the triangle’s border, resembling a potential head and shoulders continuation pattern, with shoulders forming just above a 4-year support extending from the December 2021 lows.

To confirm further downside, a firm close below this key support is required, which could accelerate the retracement toward the 0.618 Fibonacci level at $55, with additional risks extending to $49.

On the upside, if the 4-year support holds, it may signal the end of the retracement, paving the way for a resumption of the primary uptrend. This could see crude oil prices retest the 2023 highs (95) and potentially the 2022 peaks (120).

 

Crude Oil 3 Day Outlook – Log Scale

Source: Tradingview

Dropping to the 3-Day timeframe, crude oil remains within a down trending parallel channel extending from the upper border of the previous triangle pattern. This aligns with the triangle breakout target and a potential head and shoulders continuation pattern, which is still forming below the triangle’s boundaries. The Relative Strength Index (RSI) hovers below the 50-neutral zone, signaling the potential for another reversal or a bullish breakout.

While the broader trend leans bearish—in line with the sentiment for 2025—a decisive break below the 4-year support zone is required to confirm the next leg down. A firm break below $64 could trigger declines toward $60 (psychological support), $58 (lower channel border), and $55 (0.618 Fibonacci retracement of the 2020–2022 uptrend). Further downside risks could extend to the bottom border of the historical channel, ranging between $49 and $43.

On the upside, short-term resistance lies between $72 and $72.70, followed by the triangle thrust point near $78. A breakout above these levels could signal a return to bullish momentum, targeting the $80s zone with resistance levels at $84, $88, and $95, and potentially paving the way for a rally back toward 2022 highs above $100 per barrel.

Oil prices remain dominated by uncertainty, caught between bullish and bearish forecasts. The ongoing consolidation leaves prices range-bound, but the longer this phase persists, the steeper and more decisive the eventual breakout—in either direction—may be.

 

--- Written by Razan Hilal, CMT on X: @Rh_waves and Forex.com You Tube Channel

This is an excerpt from our full 2025 Crude Oil Outlook report, one of nine detailed reports about what to expect in the coming year.


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