Published: 2 December 2025,06:09
Daily Market Analysis New
*Global oversupply and weaker demand keep crude under pressure, amplified by easing geopolitical tensions.
*Prices gained over 2% after OPEC+ paused planned supply increases through 2026.
*Potential U.S. action on Venezuela and rising Fed rate-cut expectations help stabilize prices ahead of the Dec. 10 FOMC.
Crude oil prices are navigating a complex landscape, weighed down by persistent global oversupply concerns and a subdued demand outlook. These headwinds have been exacerbated by easing geopolitical tensions, including a ceasefire in the Middle East—a key supply hub—and a reduction in hostilities in Eastern Europe, which have removed a significant portion of the market’s recent risk premium.
Despite this, oil has managed a modest gain of over 2% this week, primarily driven by a decisive move from OPEC+. The cartel and its allies signaled a pause in planned supply increases through 2026, a strategic effort to counter fears of a looming glut and stabilize the market.
Further price support stems from renewed geopolitical uncertainty, as potential U.S. military action against Venezuela introduces a new risk of temporary supply disruption. From a macroeconomic perspective, growing market expectations for an upcoming Federal Reserve rate cut are fostering optimism that lower borrowing costs could stimulate economic activity and, by extension, oil demand in the medium term. As the December 10 FOMC decision approaches, this anticipation may continue to provide a tentative floor for prices, balancing the prevailing bearish fundamentals.
Technical Analysis
Oil markets are approaching a critical technical juncture, testing the upper boundary of a well-defined descending channel that has contained prices through a series of lower highs and lower lows. A decisive breakout above this channel resistance would signal a bullish structural break, potentially invalidating the immediate bearish bias and suggesting a meaningful trend reversal is underway.
Supporting this potential shift, momentum indicators are exhibiting constructive developments. While the Relative Strength Index remains below its mid-point, its stabilization alongside rising prices suggests bearish momentum is stalling. More significantly, the Moving Average Convergence Divergence indicator has completed a bullish crossover above its zero line. This follows the formation of a bullish divergence pattern—where prices established lower lows while the MACD formed higher lows—a classic technical signal that often precedes trend reversals by indicating waning selling pressure.
The convergence of these technical factors suggests the energy complex may be poised for a directional shift. However, given the established bearish channel structure, the attempted breakout requires confirmation with sustained follow-through. A successful breach would open a path toward higher resistance levels, while rejection at current levels would likely precipitate a retest of channel support.
Resistance level: 61.85, 65.15
Support level: 58.15, 55.20
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