(MENAFN- Daily Forex)

• Crude oil initially fell on Wednesday before rebounding, as the market consolidates between key levels.
• With global oversupply, sanctions volatility, and economic slowdown risks, rallies toward $62–$63 face resistance, while downside toward $58.50 remains plausible.

The light sweet crude oil market initially fell during Wednesday's trading session before turning around and showing signs of life. That said, the market appears to be consolidating, with the $62 level and the 50-day EMA offering notable resistance. Overall, oil seems to be in a period of indecision as it tries to determine its next move.

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It's important to remember that the Russians, Americans, and OPEC are all producing large quantities of crude oil. The recent price jump followed the U.S. imposition of harsh sanctions on Russia and Russian oil companies. However, Russia has been under sanctions for years and has still managed to sell oil-even within the European Union. In that context, the market may have overreacted to the latest developments, and technical analysis will likely play a key role in determining where prices head next.

The $62 level should remain a significant barrier, and even if prices break above it, a sustained move above $63 would be needed to signal a true breakout. A gap left behind from the U.S. sanctions announcement could pull the futures market down toward $58.50, a level that seems increasingly realistic given the global oversupply and growing concerns about an economic slowdown.

Such macroeconomic risks threaten oil demand, which in turn weighs on prices. For now, fading short-term rallies that show signs of exhaustion appear to be a sound strategy. However, a decisive move above $63 would warrant a reassessment of this outlook. I don't think that happens, but it is possible, and there is a possibility that you need to keep in mind that it is possible.

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