May 7 Crude Oil Analysis

Currently, the overall trend of crude oil is clearly weakening, with prices falling sharply. The previous upward premium caused by geopolitical factors has completely dissipated, and market sentiment has fully shifted to cautious observation. WTI has plummeted over 7% in a single day, while Brent has fallen nearly 8%, with bullish forces fleeing en masse, directly breaking the high-level strong pattern.

Geopolitical tensions have significantly eased, with the transit risk of the Strait of Hormuz, which accounts for 20% of global maritime crude oil transportation, being lifted. Coupled with OPEC+ members increasing production by 188k barrels per day since June, the supply-demand pattern has shifted from tight to loose, becoming the core driver of the continued decline in oil prices.

Upper resistance is focused on the 94.5–95.3 range; touching this level could be used to position for a high-level rebound. Defensive risk control should be set above 96. The first support is at 89.0–90.5; if broken, the price could further decline toward around 86.5. Do not try to bottom-fish or go long without hitting key support or showing signs of stabilization. Participate with light positions throughout, and during rebounds, take partial profits on strength. Do not hold positions recklessly; wait for clear bottom signals before considering low-buy rebounds.