From $77 to the $40s? Geopolitics and supply shape Oil’s path ahead

Crude oil prices are being pulled in opposite directions by short- and long-term forces. In the near term, geopolitical tensions—particularly Iran’s threats to close the Strait of Hormuz—pose a risk of sharp price spikes, potentially lifting crude toward $72–$77 if escalation occurs. However, the bigger picture points to an oversupply-driven consolidation.

The IEA has raised its 2025 global oil supply forecast by 2.5 million bpd, with further increases expected in 2026 as OPEC+ unwinds output cuts and non-OPEC producers, especially the U.S. and Canada, ramp up production. With sluggish demand, swelling inventories, and additional pressure from trade tensions and rising OPEC+ output, the bias remains bearish. S&P Global warns that if oversupply persists, WTI could slip into the upper $40s and Brent into the $50–$60 range by 2026.

Astro-tech and quant outlook

Planetary cycle mapping (Mercury was retrograde in LEO Neptune Aries ) suggests heightened volatility and potential false breakouts over the next 5–7 trading days, aligning with Gann’s time/price square showing a minor reversal window into Aug 25. energy markets, reinforcing the short-term sideways bias.

Technical signals

On the H1 chart, MACD is flat with a mild bearish crossover, Stochastic hovers near oversold, and DMI reflects trend exhaustion—pointing to limited immediate downside but vulnerability to choppy consolidation.

Gann geometry and cycles

Price breached the $70 Gann angle, accelerating toward $67.70 and then $64.80–$65 Resistance 1. Current structure rests near the $62.00–$62.40 minimal geometry base, a zone that aligns with the 180° time cycle from the last swing high. A decisive break above $65.50 could open the path to $67.80, but sustained bullish momentum requires a reclaim of $75–$77.

Minimal surface and smart money concepts

Multiple low-volatility touchpoints around $62 suggest potential accumulation by large players. Volume confirmation at this zone could validate a bounce; however, macro oversupply from the latest IEA forecast (+2.5 Mbpd) caps any aggressive upside.

Quant/LLM model bias

Algorithmic forecasts remain neutral-to-bearish given oversupply, swelling inventories, and stagnant demand. Short-term mean reversion signals are active, but probability-weighted upside is contained.

Suggested trade plan

• Entry: $62.40 (only on bullish confirmation: higher low or divergence).

• Stop: $61.64 (below structure low).

Target 1: $65.44.

Target 2: $67.80.

R:R: ≈ 2.0×.

Caveat: This is a counter-trend play within a broader bearish macro context.

• Execution: Monitor intraday volume clusters and planetary reversal dates (Aug 19–20) for confluence. Avoid holding through major geopolitical risk headlines unless position is heavily hedged.

While the broader macro backdrop for crude remains decisively bearish amid oversupply, bloated inventories, and weak demand, this setup offers a tactical counter-trend opportunity. Close tracking of intraday volume patterns, and alignment with key astro-market reversal dates (Aug 19–20). Given the prevailing downtrend, positions should be nimble, hedged against geopolitical shocks, and managed with heightened caution.