Oil prices retreated slightly during the Asian session on Thursday (October 16), with market sentiment weak as investors digested complex shifts in energy supply and geopolitical dynamics. On Thursday, the most actively traded commodity, US crude oil, closed at $56.99 per barrel, down 2.2% for the day. This marked its lowest settlement price since February 2021 and a 19% decline compared to the same period last year.

Market analysts noted that the International Energy Agency (IEA)'s latest report suggests a potential global energy market oversupply by 2026, prompting investors to lower their medium- and long-term oil price expectations. Meanwhile, the upcoming US-Russia diplomatic meeting marked a key turning point in the oil market this week. US and Russian leaders plan to meet in Budapest within two weeks to discuss a possible end to the conflict in Ukraine.

On a daily basis, crude oil prices have fallen below the lower limit of their range, indicating a downward medium-term trend. This sharp drop in oil prices continues to indicate a downward trend in both the subjective and objective directions. The MACD indicator's fast and slow lines are pointing downward below the zero axis, indicating a dominant bearish trend. Crude oil is expected to fluctuate downward in the medium term.

After two days of minor fluctuations and adjustments, crude oil's short-term (1H) trend continues to decline, reaching a new low of 56.80. The moving averages are diverging downward, and the short-term objective downward trend remains unchanged. Oil prices consolidated weakly at low levels in the morning session, with no new minor trend forming. We expect crude oil to continue its downward trend today. Overall, today's trading strategy for crude oil is to primarily buy on rebounds, supplemented by buying on dips. Focus on the 59.0-60.0 resistance level on the upside and the 56.0-55.0 support level on the downside.

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.