Guide to understanding crude oil and its price: Hourly, daily and weekly analysis

Important information: This article is for informational and educational purposes only. It does not constitute financial,investment advice or a solicitation to trade. All forecasting methods, scenarios, and examples are illustrative and subject to market uncertainty. It is essential to do research and due diligence to make the best possible judgment, as any purchases shall be your sole responsibility. All trading involves risk and you could lose your entire investment.

Understanding crude oil price analysis typically involves blending supply-and-demand fundamentals, geopolitics, inventories, refinery dynamics and technical observations across hourly, daily and weekly charts.

The fundamentals of crude oil markets

Crude oil is one of the world’s most actively traded and geopolitically sensitive commodities. Most global benchmarks fall into two major categories: West Texas Intermediate (WTI) and Brent.

Benchmark types

• WTI (NYMEX CL futures): Light, sweet crude delivered to Cushing, Oklahoma.
• Brent (ICE Brent futures): Seaborne crude priced off North Sea production. Used as the global reference barrel.

Contract specifications

• NYMEX WTI: 1,000 barrels per contract.
• ICE Brent: 1,000 barrels per contract.
• Tick size: $0.01 = $10 per tick

These standardized contracts form the backbone of global price discovery.

Spot vs futures prices

Spot oil refers to immediate delivery. Futures prices incorporate:

• Storage costs
• Insurance and financing
• Time-to-delivery value
• Market expectations

The difference between spot and futures creates the term structure, which plays a central role in how many analysts think about forecasting.

Contango and backwardation

• Contango: Futures > spot. This may indicate ample supply or weak demand.
• Backwardation: Futures < spot. This may indicate tightening supply or strong near-term demand.

Physical market structure

• WTI delivery hub
• Brent pricing: Floating cargoes delivered Free on Board (FOB)

Storage availability, tanker rates and refinery margins are among the factors that can affect pricing and spreads.

Major exchanges for crude oil trading

Crude oil futures trade primarily on two global exchanges that shape benchmark prices.

The CME Group’s New York Mercantile Exchange (NYMEX) lists West Texas Intermediate (WTI) futures, the most actively traded US crude benchmark. NYMEX WTI contracts are physically settled in Cushing, Oklahoma, a key pipeline and storage hub.

The Intercontinental Exchange (ICE) lists Brent crude futures, the benchmark for most internationally traded oil. ICE Brent is cash-settled and reflects broader global supply conditions given its linkage to North Sea production.

Other regional benchmarks include Dubai/Oman crude contracts traded on the Dubai Mercantile Exchange (DME), which reflect Middle Eastern supply dynamics and are widely used for Asian pricing. 

Who trades oil?

Six factors that can influence crude oil prices

1. Global supply dynamics

Global supply hinges on:

• OPEC+ production targets
• US shale activity (e.g., rig counts, DUCs*, production efficiency)
• Canadian, Brazilian, and Guyanese output in emerging growth regions
• Disruptions from weather, maintenance, or geopolitical tension

US shale is often regarded as one of the more price-responsive components, although actual outcomes depend on individual company decisions and broader market conditions.

* Drilled but uncompleted oil or gas wells

2. Global demand

Oil demand correlates strongly with:

• Global GDP growth
• Transport and mobility (e.g., aviation, road, shipping)
• Petrochemical feedstock needs
• Seasonality (e.g., summer driving, winter heating oil consumption)

Expectations for slower global growth into 2026 have influenced some demand outlooks, although such projections are uncertain and subject to revision.

3. Inventories and storage

Weekly US Energy Information Administration (EIA) and American Petroleum Institute (API) inventory reports are widely followed by market participants and can, at times, be associated with notable price moves. Inventory levels reflect the balance between supply and demand.

4. Geopolitics and risk premium

Crude is highly sensitive to:

• Middle East tensions
• Maritime disruptions (e.g., Strait of Hormuz, Bab el-Mandeb)
• Sanctions on major exporters (e.g., Iran, Russia)

Geopolitical events may introduce a risk premium or discount for limited periods, even when supply-and-demand data appear relatively stable.

5. Refining and crack spreads

Refinery margins reflect the economics of turning crude into gasoline, diesel and jet fuel.

Crack spreads influence:

• Refinery utilization
• Crude selection (light vs heavy grades)
• Regional price differences

Higher margins have historically coincided with periods of stronger refinery runs and sometimes firmer near-term crude demand, although the relationship is not guaranteed.

6. US Dollar influence

Because oil is priced in USD, a stronger dollar generally makes crude oil more expensive for non-USD buyers and can contribute to downward price pressure.

Essential technical analysis tools traders use for crude oil

Many market participants supplement fundamental data with technical tools to help contextualise price action. These tools do not predict the future or guarantee outcomes but can offer alternative ways of viewing historical price behavior.

1. Price action and key levels

Oil tends to consolidate around significant levels tied to:

• Major psychological zones (e.g., $50, $60, $70)
• Multi-year highs and lows
• Inventory-report reaction points

As of late 2025, some traders have been monitoring the following approximate zones (which can change over time):

• WTI support: $55 to $57
• WTI resistance: $62 to $64
• Brent support: About $60
• Brent resistance: About $65

2. Trend and momentum indicators

Common trend tools include:

• 20-, 50- and 100-day moving averages
• Moving average convergence or divergence (MACD) crossovers
• RSI (14) on daily or weekly charts
• Average True Range (ATR) for volatility assessment

Some analysts watch for divergences between price and momentum indicators as potential early warnings of changing conditions, while recognising that such signals can be unreliable.

3. Volume and open interest

Traders watch:

• Expansion in open interest during trending moves
• High-volume reactions to EIA or API reports
• Seasonal rollover flows

4. Volatility measures

Oil’s volatility can be structurally higher than that of equities. Common tools include:

• OVX (Oil Volatility Index)
• Bollinger Bands
• ATR and Keltner Channels

5. Pattern recognition

Crude can sometimes form:

• Ascending or descending triangles
• Flags
• Double tops or bottoms
• Volatility squeeze setups

These patterns are descriptive of past price behavior and should not be assumed to lead to specific outcomes.

Summary table: Technical tools by timeframe

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Hourly crude oil analysis: How traders observe intraday movements

Hourly charts help analysts interpret rapid shifts caused by:

• EIA weekly inventory releases (Wednesdays 10:30 a.m. ET)
• API estimates (Tuesdays 4:30 p.m.)
• Geopolitical headlines
• Dollar movements
• Broader risk sentiment (e.g., equities, yields, commodities)

Hourly indicators and tools

• VWAP as the intraday ‘fair value’ anchor
• 9/21 EMA* for microtrend direction
• Bollinger Band expansion to spot volatility bursts
• Order-flow or volume-profile tools to track liquidity pockets

These tools help contextualize intraday movement and are applied differently depending on the analyst’s approach.

* Buy and sell signals generated by the short-term (9-period) or long-term (21-period) Exponential Moving Average.

Example: EIA inventory reaction 

During the November 6, 2025 EIA report, crude inventories rose 6.4 million barrels, far above the 1.96 million expected. Brent and WTI futures fell immediately as traders priced in oversupply.

Within the next several hours, futures stabilised near pre-report structural support levels.

This shows how inventory surprises can be followed by rapid price adjustments and subsequent phases of consolidation, but similar data in the future may produce different reactions.

Hourly workflow checklist

• Check pre-market futures against overnight flows.
  
• Track API or EIA forecasts and rumor wires.
  
• Monitor USD, yields, and US 500 correlations.
  
• Map intraday value areas (VWAP, session highs/lows).
  
• Record anomalies in a journal for pattern refinement.
  

Daily crude oil analysis: How traders decode trend and momentum

Daily charts can reveal broader price structure, trend strength and medium-term sentiment.

Core daily indicators

• 20- and 50-day moving averages
• MACD for momentum cycles
• ATR for volatility compression or expansion
• RSI for overbought or oversold tendencies

Interpreting daily fundamentals

Daily analysis incorporates:

• Refinery utilization
• OPEC+ headlines
• Currency fluctuations
• Broader macro data releases (e.g., CPI, PPI, GDP)
• Cross-asset signals (e.g., equities, FX, metals)

Candlestick behavior

Oil shows distinctive daily patterns:

• Large wicks on inventory days
• Breakout or retest structures
• Rejection candles near psychological levels

Daily post-session checklist

Some traders review, among other things:

• Review volume relative to averages
  
• Update trendline and moving-average context
  
• Track refiners’ margins and crack spreads
  
• Note geopolitical developments
  
• Plan levels for next session
  

Weekly crude oil analysis: How traders view long-term trends and cycles

Traders use weekly charts to capture major cycles and structural shifts.

What weekly charts reveal

• Multi-week ranges
• Key supply and demand imbalances
• Seasonal trends (e.g., winter heating season, hurricane season)
• The impact of long-term OPEC+ decisions
• 50-week, 100-week and 200-week moving averages

Weekly support and resistance

Based on recent action in late 2025:

• WTI: Support near $55 to $57, resistance near $62 to $64
• Brent: Support near $60, resistance near $65

Seasonality considerations

• In winter, heating fuel demand increases.
• In spring, refinery maintenance lowers crude runs.
• In summer, increased time driving on the roads boosts gasoline demand.
• During hurricane season, there may be potential supply disruptions.

Systematic weekly review

Professional crude oil traders may include the following in their weekly analysis:

• Trend direction
• Inventory trends
• OPEC+ production decisions
• Demand projections from EIA, IEA, OPEC
• Currency and macro shifts
• Crack spread trends (e.g., gasoline, diesel)

Combining timeframes for multi-layered analysis

Professional commodities traders may blend hourly, daily and weekly charts for a more robust approach.

A simple framework at work (illustrative)

Handling conflicts

If weekly and daily perspectives appear constructive but hourly charts show heightened volatility around a data release, some analysts may prefer to wait for conditions to calm before forming stronger views.

Scenario example

• Weekly: Uptrend with stable inventories
• Daily: Higher lows and rising moving averages
• Hourly: Temporary dips around EIA numbers

Some market participants might view such alignment as supportive of continuation, while acknowledging that future price movements remain uncertain and can diverge from past patterns.

Market internals and advanced forecasting methods

Forecasting models provide structured ways to analyze data, but they cannot eliminate uncertainty.

Market internals

• Commitment of Traders (COT) data (commercial vs managed money)
• Crack spreads and refinery margins
• Freight rates (VLCC, Aframax)
• OPEC+ compliance reports
• Global macro indicators

Intermarket analysis

• USD movements
• Interest rates
• Copper, natural gas, gasoline and diesel prices
• Equity index performance

Advanced methods

• Autoregressive Integrated Moving Average (ARIMA) or Seasonal Autoregressive Integrated Moving Average (SARIMA) models
• Generalized Autoregressive Conditional Heteroskedasticity (GARCH)* for volatility
• Random forest or gradient-boosting models
• Long Short-Term Memory (LSTM) and Convolutional LSTM (ConvLSTM) neural networks
• Hybrid decomposition models (e.g., EEMD + LSTM)

These techniques attempt to capture nonlinearities and structural shifts, but their effectiveness can vary across time periods and market regimes.

* A statistical and econometric tool used to model and forecast the volatility of time series data in financial markets. 

How traders build and test forecasting models

Step 1: Outlining the intended purpose of a model

Potential targets include up or down direction, volatility, price range and seasonal tendencies.

Step 2: Identifying commonly referenced input features

Examples of variables studied include:

• Inventories
• Dollar index
• Crack spreads
• Seasonality
• Macro data
• Technical indicators
• Futures curve shape

Step 3: Approaches to historical model evaluation

Common evaluation frameworks may involve:

• Rolling windows.
• Multi-regime validation.
• Tests designed to reduce overfitting.
• Comparisons using metrics like mean absolute error or directional accuracy.

Step 4: Review and improve

Models are periodically revalidated as conditions shift (e.g., OPEC+ policy, shale productivity, global growth trends).

Common risks referenced in crude oil forecasting research

Examples of risk factors analysts may monitor

The following points reflect areas that some market observers track when assessing changing crude-oil conditions. 

• Interpreting multi-week inventory trends.
• Observing developments related to supply disruptions or shipping flows.
• Monitoring refinery margins and crack spreads.
• Following USD movements due to their influence on purchasing power.
• Reviewing seasonal patterns that may affect consumption or production.

For further reading, see risk management tools that are also applicable for crude oil positions.

Tools and resources traders may use for oil monitoring

Useful tools include:

• Economic calendars
• EIA Weekly Petroleum Status Report
• OPEC Monthly Oil Market Report
• CME and ICE market dashboards
• TradingView, Bloomberg, Refinitiv
• Supply-chain trackers (freight, tanker analytics)

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FAQs about crude oil prices 

Can crude oil prices be predicted accurately?

Not precisely. Oil forecasts outline possible scenarios based on supply, demand and geopolitical conditions, but unexpected events can shift occurrences quickly.

Which timeframe is the most useful?

Hourly charts capture event-driven volatility, daily charts reveal trend strength and weekly charts show structural cycles. Analysts typically use all three together for context.

Why are inventories reports influential?

Weekly EIA updates reflect real-time supply-and-demand balance. Large builds or draws can immediately shift sentiment and influence both spot prices and futures curves.

What causes sudden oil spikes?

Sharp moves often stem from geopolitical developments, supply interruptions or unexpected data releases. Oil’s global logistics make it sensitive to short-notice disruptions.

How does the US dollar affect crude oil?

Because oil is priced in USD, a stronger dollar can pressure prices by making crude more expensive internationally. A weaker dollar generally supports demand.

Are machine-learning models useful for predicting oil prices?

They can identify complex patterns and regime shifts. But like all models, they remain sensitive to unexpected events and should be viewed as supportive tools rather than definitive predictors.