On Monday (May 5) in the Asian market, US crude oil fell by more than 3%, trading around $56.26 per barrel. On May 3, OPEC+ decided to increase daily production by another 411,000 barrels in June. Combined with the previous production increases in April and May, the total increase in three months reached 960,000 barrels/day. This is equivalent to a 44% recovery from the 2.2 million barrels/day production cut since 2022. The decision to increase production reinforced the market's expectations that supply and demand will shift to surplus.

The situation in the Middle East is turbulent again. Israeli Prime Minister Netanyahu vowed to retaliate against the Houthi armed forces in Yemen for launching missiles close to their main airport. Iranian Defense Minister Nasir Zadeh responded that "If the United States or Israel launches an attack, Iran will hit back strongly." Although this may support oil prices in the short term, market sentiment is still dominated by supply pressure.

Crude oil continued to fall last week, with a large negative line at the weekly level. The high price did not break the previous high, and the low price broke the previous low, showing a tailing trend. The focus this week is whether the oil price will continue to break the previous double-needle bottoming support; from the short-term trend of crude oil, the oil price has been in a box-shaped operation, and the current oil price has moved down to the 64.88 US dollar area under pressure.

The short-term resistance level showed signs of secondary pressure around 60.2 US dollars. If the oil price cannot break through this level after the opening of Monday, it is highly likely that the oil price will show signs of pressure again, otherwise the oil price will further test the previous resistance level. On the whole, the operation strategy of crude oil today is mainly based on rebounding high altitude, supplemented by falling back to low and long. The short-term focus on the 57.8-58.3 line of resistance on the upper side and the short-term focus on the 55.0-54.5 line of support on the lower side.

Disclaimer: The article is contributed by the market analyst from Bitop market observation team. The content is solely for personal opinions and sharing. The analysis is time-sensitive and provided for reference and discussion only. It does not constitute any investment advice. The market is risky, so investing should be done cautiously.