Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
Crude Oil Forecast: Prices Extend Recovery as Banking Sector Jitters Fade

Crude Oil Forecast: Prices Extend Recovery as Banking Sector Jitters Fade

Diego Colman, Contributing Strategist


  • Oil prices rise as risk assets extend their rebound
  • The easing of turmoil in the banking sector seems to be contributing to the market's positive mood
  • Despite recent gains, the outlook for oil remains somewhat challenging
Oil Forecast
Oil Forecast
Recommended by Diego Colman
Get Your Free Oil Forecast
Get My Guide

Most Read: Fed Preview - US Dollar and S&P 500 Could Take Diverging Paths After FOMC Decision

Oil prices (WTI futures) advanced on Tuesday, extending their recovery from 15-month lows and rising for a second consecutive day, buoyed by a positive mood on Wall Street as turmoil in the U.S. banking sector continued to ease, reducing the likelihood of further stress that could be detrimental to the global economy.

In recent days, sentiment has been subdued after the collapse of two mid-sized U.S. regional lenders spooked investors and threatened to destabilize markets, but swift action by government authorities to shore up the financial system has helped restore confidence, at least to a certain degree.

With banking jitters fading for now, traders are starting to return to risk assets, bidding their prices higher and creating a more constructive environment for cyclically oriented commodities. While this dynamic has allowed WTI to rebound, its outlook is still fraught with considerable uncertainty.

A key risk for oil going forward is global demand. Although Chinese crude demand is expected to increase as activity normalizes following the removal of COVID-19 pandemic restrictions, this bonanza could be offset by lower U.S. energy consumption should the American economy enter a recession this year.

It is still uncertain whether the U.S. will hit a downturn in 2023, but the probability of this event has risen of late in the wake of the recent banking crisis, with this shock seen leading to tighter credit conditions and, therefore, slower economic activity. This can weigh on oil demand in the coming quarters.

How to Use IG Client Sentiment in Your Trading
How to Use IG Client Sentiment in Your Trading
Recommended by Diego Colman
Improve your trading with IG Client Sentiment Data
Get My Guide


After recent gains, oil is approaching a key technical resistance near the psychological $70.00 level. If bulls manage to push prices above this barrier, we can see a move toward $72.50. On further strength, the focus shifts to the $76.00 area. Conversely, if sellers return and trigger a bearish reversal, initial support comes at $66.25, followed by $64.40. Below that floor, the next downside target rests at $62.25.


Chart, line chart, histogram  Description automatically generated

WTI Oil Futures Chart Prepared Using TradingView

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.