Published: 23 December 2025,03:01
Daily Market Analysis New
Key Takeaways:
*Oil rebounded from recent lows as heightened geopolitical risks reintroduced a supply risk premium into prices.
*U.S. enforcement actions against Venezuelan oil flows have intensified, with tanker seizures and pursuits signaling a shift from rhetoric to active disruption of sanctioned exports.
Market Summary:
Oil prices rebounded from recent lows, with Brent climbing back toward $61 and WTI stabilising near $57–58, as geopolitical risk premiums resurfaced following a sharp escalation in U.S. pressure on Venezuela’s energy sector. Washington’s decision to board one tanker, seize another, and actively pursue a third sanctioned vessel has reinforced concerns around supply security, even as the physical impact on global balances remains limited.
The Trump administration’s “total and complete” blockade of sanctioned Venezuelan oil tankers represents a material tightening of enforcement rather than a symbolic threat. While Venezuela accounts for less than 1% of global oil supply, the aggressive targeting of its shadow fleet coupled with accusations linking oil revenues to narcotics financing has heightened uncertainty around sanctioned crude flows, particularly to China.
Geopolitical risks are not confined to Latin America. Markets are also digesting Ukraine’s first-ever drone strike on a Russian shadow fleet tanker in the Mediterranean, alongside attacks on Russian energy infrastructure in the Caspian region. These developments have reinforced a broader theme: growing vulnerability across opaque and sanctioned supply chains, which continues to support a geopolitical floor under prices.
That said, oil’s upside remains capped by unfavourable fundamentals. Global markets are still grappling with oversupply as Opec+ restores production faster than expected, while non-Opec output remains resilient and demand growth particularly from China remains subdued. These forces have driven crude prices down roughly 20% this year, and most forecasters still expect Brent to drift into the $50s in 2026 once geopolitical premiums fade.
In the near term, oil is likely to trade in a volatile but supported range, with prices reacting more to headline-driven supply risks than to demand signals. While geopolitical developments have stabilised prices for now, sustained upside will likely require either a sharper supply disruption or a meaningful improvement in global demand conditions.
Technical Analysis
US Oil remains structurally fragile on the chart despite the latest rebound, with price still trading below its dominant descending trendline and within a broader corrective phase. The market previously attempted to stabilize above the 58.30–58.50 region, but this area has repeatedly failed to hold as support, confirming it as an active supply zone rather than a base for accumulation.
Momentum indicators reflect improving conditions but stop short of confirming a trend reversal. The RSI has recovered above the mid-50 level, signaling short-term relief from oversold conditions; however, it remains below levels typically associated with sustained bullish phases. Meanwhile, the MACD has turned positive with a shallow bullish crossover, suggesting short-term upside momentum, though the histogram remains modestly consistent with a counter-trend bounce rather than a trend shift.
Resistance Levels: 58.30, 60.00
Support Levels: 56.30, 53.80
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