Published: 17 December 2025,06:06
Daily Market Analysis New
*Crude oil remains volatile, hitting multi-year lows before modest rebounds following U.S. sanctions on Venezuelan tankers.
*Trump’s blockade and prior military pressure could tighten near-term Venezuelan supply, creating episodic bullish support.
*Structural oversupply persists: OPEC+ cuts are unwinding, floating inventories exceed 1 billion barrels, and futures curves are in contango.
Market Summary:
Crude oil extended its recent volatility, settling at multi-year lows before rebounding modestly following U.S. President Donald Trump’s announcement of a total blockade on sanctioned Venezuelan oil tankers. On Tuesday, Brent fell 2.71% to $58.92, and WTI lost 2.73% to $55.27, the lowest close since February 2021. The decline reflected concerns over an oversupplied market, weak Chinese economic activity, and tentative progress in Russia-Ukraine peace talks, which could ease sanctions on Russian crude.
Trump’s measures against Venezuela including intensified military pressure, warship deployment, and prior tanker seizures introduce a potential bullish catalyst by limiting near-term supply. Meanwhile, U.S. and EU sanctions on Russia continue to restrict crude exports, maintaining geopolitical pressure on global supply. However, the market remains broadly oversupplied: OPEC+ is unwinding cuts rapidly, floating inventories exceed 1 billion barrels, and futures curves are in contango, signaling persistent structural excess.
China’s slowing industrial output and retail sales heighten fears that global consumption may struggle to absorb rising supply, while U.S. crude inventories are expected to build through 2026. Financial stress in the U.S. energy sector could constrain drilling, capex, and employment in oilfield services.
The oil market is navigating a complex interplay of structural oversupply, geopolitical shocks, and policy dynamics. While U.S. and EU sanctions on Russia and Venezuela may temporarily curb supply, any breakthrough in Russia-Ukraine talks could release additional barrels. Fed policy and global growth expectations also influence oil via the dollar. Volatility is likely to persist until clarity emerges on Venezuelan exports, OPEC+ discipline, and Russian supply, leaving traders caught between bearish fundamentals and episodic bullish shocks.
Technical Analysis
Crude oil prices remain entrenched within a well-defined downtrend, characterized by a persistent series of lower highs and a decline exceeding 10% from the November peak. The bearish structure was reinforced by a decisive breakdown from a bearish flag pattern—a continuation signal—followed by a failure to hold the key liquidity support near the $56.70 per barrel level.
The breach of this significant support zone, which had previously facilitated buying interest, represents a critical technical deterioration. This level now transitions to a resistance barrier, likely to cap any potential corrective rebounds.
Momentum indicators corroborate the prevailing selling pressure. The Relative Strength Index (RSI) has entered oversold territory, reflecting intense and sustained selling momentum. Concurrently, the Moving Average Convergence Divergence (MACD) continues to trend lower without signs of bullish divergence, confirming that bearish momentum remains the dominant market force.
The convergence of the pattern breakdown, the loss of key support, and bearish momentum alignment presents a coherent case for continued weakness. The path of least resistance remains skewed to the downside, with the next significant support zone projected near the $54.00 level. For the current bearish bias to be invalidated, a sustained recovery back above the $56.70 resistance would be required—a move that appears challenged under the current momentum profile.
Resistance Levels: 56.30, 58.30
Support Levels: 53.80, 51.75
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