Published: 25 December 2025,05:48
Daily Market Analysis New
Key Takeaways:
*Oil remained supported during Christmas, with U.S. enforcement actions against Venezuelan and Iran-linked shipments sustaining a supply-side risk premium despite limited immediate impact on global balances.
*Stronger-than-expected U.S. economic signals and falling interest rate expectations have helped stabilize near-term demand expectations heading into 2026.
*Elevated inventories, spare capacity among major producers, and OPEC+ supply management challenges continue to limit upside potential, keeping recent gains largely headline-driven.
Market Summary:
Oil prices remained underpinned through Christmas trading as geopolitical considerations continued to offset concerns around oversupply and muted holiday demand. Recent U.S. enforcement actions targeting sanctioned Venezuelan and Iran-linked crude shipments have reintroduced supply-side uncertainty, helping sustain a modest risk premium even as the physical impact on global balances remains limited for now.
Support has also come from relatively resilient U.S. economic indicators, which have helped stabilise demand expectations heading into 2026. Falling interest rate expectations have further improved the macro backdrop for energy consumption, though questions around global growth—particularly in China and parts of Europe continue to temper enthusiasm.
At the same time, structural headwinds remain unresolved. Elevated inventories, ample spare capacity among major producers, and OPEC+ supply management challenges continue to cap upside potential. These factors suggest that recent gains are driven more by geopolitical headlines and positioning than a meaningful tightening in fundamentals.
With most trading desks operating on reduced staffing during Christmas, oil price action has been exaggerated by low liquidity, leaving markets highly sensitive to news flow. Looking ahead, crude is likely to remain range-bound, with upside driven by escalation risk and downside vulnerability resurfacing once full market participation returns.
Technical Analysis
USOIL, H4:
Crude Oil on the chart is showing early signs of recovery after a prolonged corrective phase, but the broader structure remains technically fragile. Price has rebounded strongly from the 55.00 support level, an area that previously acted as a demand base, and is now pushing higher toward the descending trendline that has capped price action for several weeks. This trendline, which has defined the series of lower highs, remains a key technical barrier, and the recent rebound appears corrective unless price can break and hold above it with conviction.
From a momentum perspective, conditions are improving but not yet decisively bullish. RSI has climbed into the mid-60s, signaling strengthening bullish momentum and suggesting buyers are regaining control in the short term. However, RSI is approaching levels where previous rallies have stalled, which raises the risk of a near-term pause or pullback if upside follow-through weakens. The MACD has turned positive with a bullish crossover and a rising histogram, indicating that upside momentum is building, though the move is still relatively fresh and needs continuation to confirm a trend shift.
Resistance Levels: 58.50, 60.60
Support Levels: 56.80, 55.00
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