Crude Oil Drops to 68.00, Erasing All War-Time Gains

Trading volumes were elevated during the selloff, a sign of real liquidation. Open interest in WTI futures fell sharply last week, according to exchange data. That reduces the chance of a V-shaped rebound. A recovery, if it comes, is more likely to be slower and narrower, with sellers absorbing early bids. Near-term futures slipped more than deferred contracts, widening the contango and encouraging storage plays.

The broader macro backdrop offered little support. The dollar index held near recent highs, making dollar-denominated crude more expensive for buyers using other currencies. Equity markets were steady, offering no tailwind from risk appetite.

What would confirm the bounce? A daily close above $70.50, the 10-day moving average. That level is the first hurdle. A clean break above it would attract algos and momentum traders who have been leaning short. The 50-day moving average near $74 would be the next target, then the $79.20 resistance. A close below $67.50, on the other hand, would invalidate the support thesis and shift the bias to short. The next support after that is $63, the February low.

The catalyst for either move could come from the weekly inventory reports due Wednesday. A larger-than-expected drawdown would support prices. A build would add pressure. The structure now is a classic test of a prior pivot. The zone has worked before. It may not work this time. The difference this round is the lack of a fresh geopolitical trigger to replace the one that faded. Inventory data arrives Wednesday at 10:30 a.m. ET.