During the Asian trading session on Tuesday (October 21st), US crude oil prices continued to face pressure this week, currently trading around $56.72 per barrel. The latest report from the International Energy Agency (IEA) was the direct trigger for this drop in oil prices. The report indicates that by 2026, the global crude oil market could face a potential oversupply of approximately 4 million barrels per day, a figure far higher than previously anticipated. Meanwhile, the U.S. Energy Information Administration (EIA) also raised its domestic crude oil production forecast and warned that inventory levels are still rising, indicating that supply pressures have not yet eased. The signs of ample supply are even more pronounced in the spot market.

Furthermore, renewed trade concerns are casting a shadow over the global manufacturing outlook. Although the arrival of winter in the northern hemisphere may boost heating fuel consumption, gasoline and jet fuel demand has yet to return to year-ago levels, indicating weak growth in total energy demand.

Looking at the daily crude oil chart, US crude oil prices are currently still within a downward trend. If they fail to hold above $60, the short-term trend could extend to the $55-56 area. This level represents both psychological support and a previous low; a break below it could trigger further passive selling.

If market sentiment improves or OPEC+ unexpectedly cuts production, short-term resistance at $62-63 could emerge. Overall, however, both market trends and fundamentals suggest a bearish outlook. Therefore, today's crude oil trading recommendation: short at $56.00, stop-loss at $56.60, target at $57.50.

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.