Published: 9 December 2025,03:30
Daily Market Analysis New
*Supply Recovery Eases Pressure: Iraq’s restoration of West Qurna 2 oilfield production (+460,000 bpd) eased supply tightness, pulling oil prices back from two-week highs.
*Ukraine & Russia Risk Repricing: Slow progress in Ukraine peace talks and potential resolution could unlock up to 2 million bpd of Russian oil, weighing on prices.
*Policy & Geopolitics: G7/EU consideration of a maritime services ban on Russian oil introduces uncertainty, but traders see this as less impactful than the supply boost from Iraq.
Oil prices pulled back from two-week highs as supply concerns eased following Iraq’s restoration of production at the West Qurna 2 oilfield bringing back more than 460,000 barrels per day and immediately reducing tightness expectations. This return of supply countered the prior geopolitical bid caused by infrastructure risks and contributed to a broader rebalancing in crude markets. The prospect of reduced wartime disruptions in Ukraine also raised the possibility of higher future Russian exports, adding to the bearish tone.
Markets also weighed the potential medium-term oversupply narrative. Analysts highlighted that Trump’s aggressive push for a negotiated end to the Ukraine conflict could shift more than 2 million barrels per day of Russian-related supply back into global markets if sanctions ease. Meanwhile, additional flows from OPEC members and smaller producers continue to lean against expectations of a supply deficit in early 2026.
On the policy front, the G7 and EU are considering the replacement of the Russian crude price cap with a stricter maritime services ban. While this introduces uncertainty, traders judged the policy risk as insufficient to offset the bearish impulse from Iraq’s restored output. The shift toward easing geopolitical tensions echoed by slow progress in Ukraine talks also reduced the risk premium keeping crude elevated.
Despite these pressures, not all risks are one-sided. Venezuelan instability, tighter U.S. sanctions enforcement, and continued vulnerability in Russian energy infrastructure remain potential upward catalysts. Still, with supply returning and risk appetite improving globally, crude is trading softer ahead of the Fed meeting, which could shape the next directional move for energy markets.
Technical Analysis
USOIL is currently trading back inside the descending channel after failing to sustain a breakout above the 59.90 resistance. The rejection at the channel’s upper boundary marks a clear loss of bullish momentum, and price has now slipped toward the mid-channel region, reinforcing that the broader structure remains bearish. Despite the recent attempt to push higher, buyers were unable to hold above 59.90, suggesting that upside strength is still limited in a market that has been trending lower for several weeks. As long as price remains below that resistance and within the falling channel, the bias leans toward continued downward pressure, with the next immediate support sitting at 58.00.
Momentum indicators support this view. The RSI currently sits around 41, which is below the midpoint and indicates weakening bullish conviction. It is not yet oversold, meaning the market still has room to move lower without signaling exhaustion. This aligns with the broader trend and suggests sellers may continue to dominate unless a strong reversal pattern forms. The MACD also reflects fading bullish momentum: the lines have crossed downward, and the histogram has shifted slightly negative, revealing early bearish continuation rather than any strong bullish recovery. There is no convincing buy signal at this stage, only signs that the recent bullish attempt has stalled.
Resistance level: 59.90, 61.45
Support level: 58.00, 56.40
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