The report is to be concluded with a technical analysis of WTI’s daily chart.   

US intervenes in Venezuela

On Saturday, US President Trump announced that the US has arrested Venezuelan President Maduro and his wife in Caracas. The Venezuelan President was extracted and transferred to the US, where he is to face charges including narco-terrorism conspiracy and cocaine importation conspiracy in a superseding indictment.

The extraction of Maduro by US forces created a power vacuum in Venezuela, which seems to be covered by Venezuela’s Vice President Delcy Rodriguez, now sworn in as Venezuela’s Interim President. The Venezuelan Interim President seems to be approved also by the US, in a surprise move. We have to note that Rodriquez despite issuing harsh statements for the US intervention at the beginning, seems to have now moderated her stance which may allow for some corridors of a new modus vivendi to emerge.

US President Trump has since repeatedly stated that the US will be supervising Venezuela and profit from oil extraction, characteristically  stating that the US will be controlling Venezuela’s oil for years. The issue is in direct contempt of the rule of international law, yet that is for the oil market is of little consequence at the current stage.

We have no doubt that the US may be planning to flood the market with Venezuelan oil, as the country has the largest oil deposit world-wide and presumably US sanctions of exports of Venezuelan oil are to be lifted, now that US companies are to take over. Such intentions could weigh on oil prices as the supply side of the commodity’s market will hike production levels.

Yet such a hike may take time as US sanctions are still in place, and the oil industry infrastructure in Venezuela  may need considerable expansion to accommodate the higher oil production levels. Should we see indications of increased production in the short term, such as a lift of US sanctions, we expect oil prices to lose ground, while difficulties in increasing oil production in Venezuela, may support oil prices.

More sanctions on Russian oil

On the other hand, the US President seems to be intensifying the pressure on Russia to end the war in Ukraine, by allowing the Russia sanctions bill to advance. It should be noted that Republican Senator Lindsey was reported by Reuters to have stated that US President Trump has given the green light to proceed with legislation, with the relevant voting occurring possibly as early as next week. The issue intensified market worries for a possible further tightening of the supply side of the international oil market which tends  in turn to provide support for oil prices.  

US oil market unexpectedly tightens

We note that over the past week oil market related data from the US highlighted an unexpected tightening of the US oil market. Characteristically, API on Tuesday reported a drawdown in US crude oil inventories of -2.8 million barrels, thus implying that aggregated oil demand in the US surpassed oil production levels.

The drawdown reported by API was unexpected as initially another, narrower increase of US oil reserves was expected. The picture of a tightening US oil market was further enhanced on Wednesday as the Energy Information Administration’s (EIA) Crude Oil Inventories figure also unexpectedly, showed a drawdown of -3.832 million barrels.

Should we see further tightening of the US oil market, in the coming week, we may see oil prices getting some support. On the other hand we have to note the decline in economic activity of the US manufacturing sector, as reported by the ISM manufacturing PMI figure for December and the US factory orders growth rate for November, which may be warning for a possible easing on the demand side of the US oil market. 

Oil Technical Analysis

WTI Cash Daily Chart

• Support: 56.00 (S1), 51.40 (S2), 46.15 (S3)
• Resistance: 59.80 (R1), 62.40 (R2), 66.20 (R3)

Despite some subtle bearish tendencies for WTI’s price, over the past two days, the commodity’s price action has remained well within the boundaries set by the 59.80 (S1) support line and the 59.80 (R1) resistance level. It should be noted though that WTI’s price is currently testing the 56.00 (S1) support line.

We note the downward trendline active since the 24^th of October, yet at the same time we note the failure of the commodity’s price action to form lower troughs. For the time being we tend to maintain a bias for a sideways motion to be maintained, at least as long as the S1 and the R1 remain intact. The RSI indicator remains below but close to the reading of 50, implying a rather indecisive market sentiment for the direction of the commodity’s price action.

Also the Bollinger bands seem to be narrowing, which may imply lower volatility for WTI’s price which in turn may allow the sideways motion to continue. For a bearish outlook to emerge on a technical level, we would require WTI’s price to break clearly the 56.00 (S1) support line and continue lower aiming if not breaching the 51.40 (S2) support level. For a bullish outlook to emerge, we would require WTI’s price to break the 59.80 (R1) resistance line and continue higher aiming if not breaching the 62.40 (R2) resistance base.   

إخلاء المسؤولية:
This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked in this communication.

The post Oil Outlook : Oil prices seem to stabilise   appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.

US oil market seems to be tightening

Over the past week, we had signals for the US oil market implying a tightening. It started last Friday, with the Baker Hughes oil rig count increasing by one in a weak signal of increasing demand.

On Tuesday, the American Petroleum Institute reported a wide drawdown of US oil inventories of -9.3 million barrels, a drawdown certainly far wider than the expected -2.2 million barrels and not seen since June. The release highlighted that the US oil market is tightening as aggregated oil demand in the US was able to surpass oil production levels widely.

Yet yesterday, the Energy Information Administration’s report (EIA) tended to ease market worries as it also reported a drawdown, yet a far narrower one of -1.274 million barrels, which was narrower than the expected -2.4 million barrels, yet still implied that the US oil market is still tightening albeit at a possibly slower pace.

Should we see further signals of decisive tightening of the US oil market we may see oil prices getting some support, while should US oil inventories start rising again we may see oil prices being under pressure. 

Additional US sanctions on Russian oil could push oil prices higher

Yesterday, Bloomberg reported that should Russia reject a possible US peace plan for the war in Ukraine, the White House would prepare additional sanctions on Russian oil. According to the report the US may target Russian vessels and traders facilitating the Russian oil trade.

The market’s worries about the issue were amplified by the seizure of Venezuelan oil tankers early this week. We do not consider the possibility of the US seizing Russian vessels as probable, actually we consider it as remote, given the possible angry reaction from Moscow, yet the possibility of a new round of US sanctions on Russian oil, could provide some support for oil prices.

Please note that the market has allready largely priced in the already imposed US sanctions, while also note that US sanctions on Russian oil have effectively lowered its price, which may have also been reflected on the lowering level of oil prices in the international oil markets. Hence, the possibility of US sanctions on Russian oil may emerge, yet the support for oil prices may prove to be temporary or moderated. 

Further escalation in Venezuela could also support oil prices

After the seizure of a Venezuelan oil tanker, discussed in last week’s report, tensions escalated further as US President Trump ordered a blockade of all sanctioned oil tankers from entering or leaving Venezuelan ports. The US move is targeting the heart of Venezuelan government’s financing, adding more pressure on Venezuelan President Maduro to resign.

For the time being, reports highlight that as a response, besides characterising the US seizure of the ship as piracy, the Venezuelan government in defiance of the US government’s blockade, has ordered its navy to escort oil tankers in and out of Venezuela. It should be noted that the actions of the US Government have met scepticism within the US, by political opponents of US President Trump.

It should be noted that the Venezuelan PDVSA has yesterday resumed loading crude and fuel cargoes, after a suspension of operations due to a cyberattack last Sunday.

Estimates talk of Venezuelan exports of 900k barrels of oil per day and the threat of a deeper reduction of Venezuelan oil exports could have a bullish effect on oil prices. We note that the issue seems to be on a make-or-break point, as another possible seizure of a Venezuelan oil tanker or further escalation with US military operations on the ground of Venezuela could provide support for oil prices.

Oil Technical Analysis

WTI Cash Daily Chart

• Support: 51.40 (S1), 46.15 (S2), 42.00 (S3)
• Resistance: 56.00 (R1), 59.80 (R2), 62.40 (R3)

After  a drop since our last report WTI’s price seems to be teasing the 56.00 (R1) line. We tend to maintain a bearish outlook for the commodity’s price given that the downward trendline remains intact and the commodity’s price continues to form lower peaks and lower troughs. Also the RSI indicator despite correcting higher, remains below the reading of 50 implying a bearish inclination among market participants.

Also please note that WTI’s price action corrected higher yesterday after breaching below the lower Bollinger band, a rather expected reaction of the commodity’s price action. Please note that the 20, 100 and 200 moving averages, all point downwards supporting our current bearish outlook for WTI’s price. Despite further correction higher being possible, should the bears maintain control we may see WTI’s price action actively aiming if not breaching the 51.40 (S1) support line.

Yet a continuance of the drop of the commodity’s price would be entering levels not seen for the past four years, which may scare sellers. Should the bulls gain control over WTIs’ price, we may see it breaking the 56.00 (R1) resistance line and continue to move higher breaking the 59.80 (R2) resistance level, thus paving the way for the 62.40 (R3) resistance barrier. A stabilisation of the commodity’s price is also possible between the 56.00 (R1) line and the 59.80 (R2) level.      

إخلاء المسؤولية:
This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked in this communication.

The post Oil Outlook: Oil bears hesitate appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.

US seizes a Venezuelan oil tanker

The US in an apparent escalation of tensions against Venezuela, seized a sanctioned oil tanker of the coast of Venezuela. Per President Trump “We’ve just seized a tanker on the coast of Venezuela, large tanker, very large, largest one ever, actually, and other things are happening”, with Venezuela responding that the seizure was an “act of international piracy”. The seizing of a Venezuelan oil tanker, even a sanctioned one still marks an escalation in tensions between Washington and Caracas, considering Venezuela’s oil exports are essentially their economic lifeline.

In this analyst’s opinion, the US may be wary of replacing Maduro with the use of direct military force such as troops on the ground and thus a more political friendly method could be by the exertion of economic pressures. For example, should the US continue to disrupt Venezuela’s oil shipments it may increase pressure internally for a change to be made, which could pave the way forward for the ‘installation’ of a more pro-western President in the nation.

Initially, the seizure of an oil tanker may have aided oil prices as worries about further seizures may have spooked participants, considering Venezuela exports 900,000 bpd and thus further seizures could threaten the supply of oil into the market.

However, let’s look at the larger picture and the hypothetical scenario where the US continues pulling the economic lever to force a regime change in Venezuela. Such a scenario, where a pro-US administration is installed could weigh on oil prices, as sanctions may be lifted on Venezuelan oil exports which in turn could rapidly increase the supply of oil into the global market. Nonetheless, we should remind our readers that at this point in time, such a scenario remains a hypothetical.

Ukraine-Russia peace deal

Ukraine and Russia could be heading towards a possible peace deal. According President Zelensky, Ukraine alongside its European allies, will be presenting the US with refined documents on a peace plan meant to end the war with Russia. Specifically, Zelensky stated the following “The Ukrainian and European components are now more developed, and we are ready to present them to our partners in the U.S.,”. Considering how many attempts have been made by both sides, we remain sceptical as to whether or not actual progress will be made in ending the war. Nonetheless, any viable prospects for peace could weigh on oil prices, as an end to the war could result in the suspension of sanctions on Russian oil exports, thus potentially resulting in an influx of oil barrels entering the market.

China’s shale fracking

According to some media reports, China has achieved significant breakthroughs in it’s shale fracking technology following the announcement that the Jimsar shale oil demonstration zone in Xinjiang has reached its annual crude oil output goal of 1.7 million tonnes.  Although this may appear to be a significant development, it’s short term impact may be relatively muted as the volume itself may not be large enough to influence the global oil markets. Nevertheless, the developments may have a long term impact on oil prices in the future should they reach much higher output volumes which in turn could weigh on oil prices in the future and thus developments of China’s fracking technology warrant attention from market participants.

Oil Technical Analysis

WTI Cash Daily Chart

• Support: 55.95 (S1), 53.75 (S2), 51.50 (S3)
• Resistance: 57.95 (R1), 59.99 (R2), 62.35 (R3)

WTI’s price action appears to be moving in a downwards fashion, having currently penetrated our support now turned to resistance at the 57.95 (R1) level. We maintain our bearish outlook for the commodity and supporting our case is the downwards moving trendline which was incepted on the 24^th of October, in addition to the indicators below our chart which tend to imply a bearish market sentiment. For our bearish outlook to be maintained we would require WTICash’s price to remain below our R1 level if not also clearing our 55.95 (S1) support level, with the next possible target for the bears being our 53.75 (S2) support line.

On the other hand, for a bullish outlook we would require a clear break above our 57.95 (R1) resistance line if not also our 59.99 (R2) resistance level with the next possible target for the bulls being our 62.35 (R3) resistance line. Lastly, for a sideways bias we would require the commodity’s price to remain between our 55.95 (S1) support level and our 57.95 (R1) resistance line.

إخلاء المسؤولية:
This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked in this communication.

The post Oil Outlook:US escalates tensions with Venezuela appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.

In today’s report we are to have a look at fundamental issues that could alter its direction, including the US peace plan for the war in Ukraine, OPEC’s intentions, and the state of the US oil market.

We are to conclude the report with a technical analysis of WTI’s daily chart.

US peace plan for Ukraine negotiations tend to weigh on oil prices

The negotiations for the US peace plan for the war in Ukraine tend to weigh on WTI prices, as a scenario of the peace plan being agreed upon would possibly unlock exports of Russian oil production, thus flooding the international oil market’s supply chains. Substantial progress has been reported in the negotiations, yet there are still some obstacles on the road to peace.

One thorn the persists is Ukraine’s refusal to cede some areas to Russia, which it considers as strategic. It should be noted that the Russians are still slowly advancing and a potential abandoning of Ukraine by the US could cause the Ukrainian defence to collapse. As US President Trump was reported stating, “The way it’s going, if you look, it’s just moving in one direction.

So eventually that’s land that over the next couple of months might be gotten by Russia anyway”. On the flip side, we still are skeptical for a possible peace deal at the current stage as the two sides, but especially Russia may lack sufficient incentive to actually reach an agreement.

Should we see further signs of the peace plan progressing we may see oil prices retreating further while on the flip side, should the negotiations fall through oil prices could get substantial support.  

Data from the US oil market remain mixed

In the US data for the oil market tend to remain mixed. On Friday Baker Hughes oil rig count ticked up to 419 active oil rigs, a positive signal of a possibly increasing oil demand in the US.

The positive signals were further enhanced on Tuesday as API reported a drawdown of US oil reserves of -1.9 million barrels, in a sign that aggregated oil demand in the US exceeded oil production levels.

Yet the picture of a possibly tightening US oil market was overturned on Wednesday as EIA reported an increase of US oil inventories by 2.774 million barrels. Should we see further signs of a tightening US oil market we may see the oil prices getting some support and vice versa. 

OPEC’s intentions

Also we note that on a direct producer level in the international oil market, OPEC’s intentions remain key regarding the commodity’s price direction.

Please bear in mind that the market is allready considered oversupplied, the possibility of Russia overflowing the market adds more pressure on oil prices and it was reported that on Sunday OPEC had a meeting at which it was common consensus that oil production levels are to remain unchanged.

It should be noted that the alliance has increased oil production in the past few months. Yet keeping oil production levels unchanged may intensify the flow of oil in the markets thus we consider OPEC’s intentions currently, as bearish for oil prices.

Yet another issue for OPEC at the current stage would be price vulnerability, which for the past few weeks has been one sided to the lower side, which may cause second thoughts among key member like Saudi Arabia, hence that should be one risk the market should bear in mind.  

Market’s expectations for the Fed to cut rates may support oil prices

Albeit not directly related to the oil market the market’s expectations for the Fed to proceed with a rate cut in the December meeting tend to limit the losses for oil prices.

On a fundamental level, that could be explained by the notion that the lower rates would encourage an increase of economic activity in the US including the industrial sector thus increasing the demand for oil. Thus any intensification of the market’s dovish expectations for the Fed could continue supporting oil prices.

Oil Technical Analysis

WTI Cash Daily Chart

• Support: 56.00 (S1), 51.40 (S2), 46.15 (S3)
• Resistance: 59.50 (R1), 62.40 (R2), 66.20 (R3)

WTI’s price action seems to have stabilised somewhat over the past few days between the 59.50 (R1) resistance line and the 56.00 (S1) support level. Nevertheless, the downward trendline guiding the commodity’s price since the 23^rd  of June remains intact hence our bearish outlook is maintained.

The RSI indicator tends to remain below the reading of 50, implying a continuance of a bearish market sentiment for the commodity, yet is not as convincing and given the relative stabilisation of WTI’s price over the past few days we issue a warning for the emergence of a sideways motion scenario, possibly between the 56.00 (S1) support line and the 59.50 (R1) resistance line.

For the bearish outlook to be maintained for WTI’s price action it would have to form a new lower trough which would imply that the commodity’s price action has to break the 56.00 (S1) support line and start aiming for the 51.40 (S2) support level.

For a bullish outlook to be adopted the bar is high as WTI’s price action would have to break the prementioned downward trendline in a first signal that the downward motion has been interrupted and continue to break also the 59.50 (R1) resistance line and reach if not breach the 62.40 (R2) resistance base.   

إخلاء المسؤولية:
This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked in this communication.

The post Oil Outlook: Oil prices tend to stabilise appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.

US Employment data due out today

The US Employment data for September are due out today and could lead to significant volatility in the markets.

Our reasoning is that, following yesterday’s announcement from the BLS that the October jobs report will not be released, today’s employment data marks the last time that the Fed will gain insight into the state of the US Labour market prior to their last monetary policy decision for the year.

In particular, the Fed’s last decision is set to occur on the 10th of December, whereas the November jobs report is due out on the 16th of December, hence today’s release is of even greater importance. The current expectations by economists are for the NFP figure to improve, which could aid the dollar but when looking at the big picture, the state of the US labour market still remains relatively loose.

Nonetheless, for oil traders should concerns arise for the state of the US economy it may weigh on WTI prices as it may be inferred that there could be a reduction in economic activity which may translate to a reduction in demand for oil.

On the other hand, should the outlook for the US economy appear to improve it may have the opposite effect.

Mixed data from the US oil market

We make a start with our comment about the state of the US oil market by noting that the number of active oil rigs in the US was reported by Baker Hughes last Friday, increased to 417, in a signal, possibly, that oil demand picked up in the US market.

On Tuesday, API reported that US crude oil inventories had risen by 4.4 million barrels, marking a notable increase from last week’s 1.300 million barrels.

The reading showcases that aggregated oil demand in the US was surpassed by oil production levels for another week as oil stockpiling continues.

However, that image was countered on Wednesday with the release of the EIA weekly crude oil inventories which showcased a drawdown of -3.426 million barrels, which exceed the anticipated drawdown of -0.600 million barrels.

Nonetheless, should the overall picture showcase an increase in oil inventories in the coming week it could weigh on oil prices and vice versa.

US sanctions on Russian oil to be applied tomorrow

It should be noted that the sanctions on Russian oil companies Rosneft and Lukoil will come into effect tomorrow the 21st of November.

In turn should market worries arise about the possible supply of oil into the market, post-sanction deadline it may have a bullish effect on oil prices.

However, until the true impact of sanctions on the Russian oil companies emerges, the impact may be relatively muted.US sanctions on Russian oil to be applied tomorrowIt should be noted that the sanctions on Russian oil companies Rosneft and Lukoil will come into effect tomorrow the 21st of November.

In turn should market worries arise about the possible supply of oil into the market, post-sanction deadline it may have a bullish effect on oil prices. However, until the true impact of sanctions on the Russian oil companies emerges, the impact may be relatively muted.

US-Russia draft new peace plan for Ukraine

According to the FT, the US and Russia have drafted a new peace plan for Ukraine. In turn the possibility of the plan being accepted by Ukraine could possibly weigh on oil prices as a peace plan could lead to a suspension and lifting on oil sanctions on Russia.

Hence, such a possibility could lead to an increase in the supply of oil into the market, which could in turn weigh on oil prices. Albeit, we should take any developments with a pinch of salt as previous attempts have been made and failed in the past.

Oil Technical Analysis

WTI Cash Daily Chart

• Support: 58.32 (S1), 55.25 (S2), 52.00 (S3)
• Resistance: 61.75 (R1), 66.15 (R2), 69.70 (R3)

WTI’s price appears to be moving in a sideways fashion, with the commodity’s price failing to clear our 58.32 (S1) support level.

We opt for a sideways bias for the commodity’s price and supporting our case is the RSI indicator below our chart which currently registers a figure near 50, implying a neutral market sentiment.

For our sideways bias to be maintained we would require the commodity’s price to remain confined between our 58.32 (S1) support level and our 61.75 (R1) resistance line.

On the other hand, for a bullish market sentiment, we would require a clear break above our 61.75 (R1) resistance line with the next possible target for the bulls being our 66.15 (R2) resistance line. Lastly, for a bearish outlook we would require a clear break below our 58.32 (S1) support level with the next possible target for the bears being our 55.25 (S2) support line.

إخلاء المسؤولية:
This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked in this communication.

The post Oil Outlook: Oil remains steady as markets await US Employment data appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.

US oil market seems to remain loose

We make a start with our comment about the state of the US oil market by noting that the number of active oil rigs in the US was reported by Baker Hughes last Friday, to have remained unchanged at 414, in a signal possibly, that oil demand failed to pick up in the US market.

Yesterday, Wednesday, API reported that US crude wti inventories had risen by 1.3 million barrels, a figure lower than the expected 1.7 million barrels and substantially lower than last week’s reported increase of 6.5 million barrels.

Despite the figure being lower than expected and lower than the prior reading, it still implies that aggregated oil demand in the US was surpassed by wti production levels. Hence there still seems to be a slack in the US oil market which could weigh on the oil prices.

We note that later today, we get EIA US crude oil inventories figure and should the report verify the looseness of the US oil market we may see an intensifying bearish effect on oil prices.

Worries for a possible oversupply of the oil market

Market worries for a possible oversupply of the international wti market tended to intensify after EIA released its November 2025, wtimarket report. In the report the Agency states that “Global oil market balances are looking increasingly lopsided, as world wti supply is forging ahead while oil demand growth remains modest by historical standards” in a signal of the Agency’s expectations for a possible oversupply of the international wti market.

It should be noted that the expectations for the oversupply have risen to a bit more than 4 million bpd, which tends to have a bearish effect on oil prices. It’s also interesting that the Agency has noted that “ Global observed wti inventories surged by 77.7 mb, or 2.6 mb/d, in September reaching the highest level since July 2021” which highlights the slack in the international oil markets.

Hence to cut the long story short, there is a slack allready in the international wti market, which is expected to grow even further, as oil production forges ahead, while oil demand seems to rise hesitantly.

Also OPEC seems to ease its expectations

Also OPEC in its monthly report for November 2025 seems to have shifted its expectations for the outlook of the international oil market. Up until recently, the wti production organisation was reporting a deficit in the of oil in the international oil market, while now it seems to see it as balanced. OPEC’s expectations may ease any pressures to increase oil production further.

Yet in the grand scheme of things, the expectations for the international wti market to be balanced by the end of the year and in 2026, shifting for a deficit in supply, could in turn weigh on oil prices.

US sanctions on Russian oil to be applied

It should be noted that the Russian wti companies Rosneft and Lukoil, but also the Russian oil industry as a whole, have come under increased pressure after the United States and United Kingdom have applied sanctions on the two companies. It should be noted that the two prementioned wti companies together produce and internationally market about half of Russia’s crude oil.

Please note that he sanctions are to come into effect on the 21st of November, and despite Russian exports having
remained largely unchanged for the time being as oil in tankers piles up, given that importers of Russian oil are working out policies to bypass possibly the UK and US sanctions.

For the time being, the issue seems to pass under the radar, yet as the 21st of November nears, we may see the sanctions having a bullish effect on oil prices.

Oil Technical Analysis

WTI Cash Daily Chart

• Support: 56.00 (S1), 51.40 (S2), 46.15 (S3)
• Resistance: 59.50 (R1), 62.40 (R2), 66.20 (R3)

WTI’s price dropped yesterday, breaking the 59.50 (R1) support line now turned to resistance. We note that the RSI has dropped below the reading of 50, yet still remains unconvincing for the market’s bearish tendencies as it remained close by.

Also the Bollinger bands failed to widen or their median to change direction, hence we tend to maintain our bias for the commodity’s price to remain in sideways motion confined within the barriers set by the 62.40 (R2) resistance line and the 56.00 (S1) support level. For a bearish outlook we would require a clear break below our 56.00 (S1) support level, a level below which the commodity has seen no price action since early 2021, with the next possible target for the bears being our 51.40 (S2) support baseline.

Lastly, for a bullish outlook we would require a clear break above our 59.50 (R1) resistance level and WTI’s price to continue higher and break also the 62.40 (R2) resistance level with the next possible target for the bulls being our 66.20 (R3) resistance line.

إخلاء المسؤولية:
This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked in this communication.

The post Oil Outlook: Oil’s bearish tendencies remain unconvincing for now appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.

OPEC to pause their oil output increase next year

OPEC+ stated on Sunday that they would add another 137,000 barrels per day in December but would halt any further rises in January, February and March. Per the FT, the oil cartel has justified their pause as a result of “seasonality” where oil demand in the first quarter is usually weaker after the end of the holiday season. It appears to us that OPEC+ is worried about ‘drowning’ the market in oil which could result in a reduction of oil prices and thus, despite their plans to regain their lost market share, the oil cartel may need to pump the brakes temporarily to ensure there is adequate demand.

In turn the announcement may have provided support for oil’s price due to the reduction of future supply into the market. Moreover, we would like to raise a relatively unorthodox point of view where we raise the question of whether OPEC members are concerned that the Venezuelan government could be toppled, where one could assume that a new leader could lead to closer ties with the US and thus may achieve the easing of oil sanctions on the nation.

A reduction of sanctions could allow Venezuelan oil to re-enter the market more freely. Nonetheless, sticking to what we know the moves by OPEC+ are designed to reduce future supply of oil into the market, at least for the first quarter of 2026 and may thus provide some support to oil prices.

US Government shutdown T+37

The US Government shutdown has now entered it’s 37th day and at the time at this report appears poised to continue into the coming week as well. The 37th day anniversary marks the longest government shutdown in the US’s history and could begin to raise concerns over the state of the US economy. In particular, some have claimed that with every week that passes that the US government shutdown, it could cost the economy between $10-$30 billion dollars which could have a tremendous negative effect on the US’s GDP rate.

Hence, with the markets attention finally shifting towards the ongoing shutdown and the negative effects which it may lead to in the US economy, oil market participants may be beginning to be taking those worries into account. In particular, a reduction of economic activity in the US could possibly lead to a reduction of oil and thus using a basic economic principle of supply exceeding demand, the price of oil may face downwards pressures. In our view, albeit an unorthodox one yet again, the election of Zohran Mandami may signal to Democratic Senators that the public perception has yet to shift against them and thus with Democratics making gains across the nation, they may not be under immediate pressure to cave into the Republican party’s demands.

Hence, we would not be surprised to see the Government shutdown extending possibly towards the end of the month which in turn could weigh on oil prices should concerns over the state of the US economy emerge.

US-China trade relationship thaws following an agreement being reached.

Since last Thursday, the US and China have agreed to terms in regards to a prolonged ceasefire trade agreement between the two economic behemoths. Thus given that the markets have already digested this information, we will provide a quick summary of the events which occurred for this particular paragraph. In a nutshell, the US stated that they will suspend the 50% rule for export controls and Beijing stated they will likewise suspend for one year the implementation of its rate earth export controls, amongst other measures, essentially bringing the trade standoff to a temporary end.

The effect on the oil market was seen on Thursday, as the threat of a trade war diminished, optimism for a possible increase of manufacturing activity grew which in turn may imply an increase in demand for oil. For now the two sides have stopped sharpening their knives, but considering how quickly opinions and decisions change, we would keep an eye out for any developments.

Oil Technical Analysis

WTI Cash Daily Chart

• Support: 58.90 (S1), 55.25 (S2), 52.00 (S3)
• Resistance: 61.75 (R1), 66.15 (R2), 69.70 (R3)

Since our last report WTI’s price appears to have fluctuated around the $60 per barrel figure. For the time being, we would opt for a sideways bias for the commodity’s price and supporting our case is the RSI indicator figure below our chart which currently registers a figure near 50, implying a neutral market sentiment. For our sideways bias to be maintained, we would require the commodity’s price to remain confined between our 58.90 (S1) support level and our 61.75 (R1) resistance line.

On the other hand for a bearish outlook we would require a clear break below our 58.90 (S1) support level with the next possible target for the bears being our 55.25 (S2) support line. Lastly, for a bullish outlook we would require a clear break above our 61.75 (R1) resistance level with the next possible target for the bulls being our 66.15 (R2) resistance line.

إخلاء المسؤولية:
This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked in this communication.

The post Oil Outlook: OPEC pumps the brakes on increasing oil output next year appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.

Improvement of US-Chinese trade relationships could support oil prices.

The Trump-Xi meeting seems to be leading to an improvement of the US-Sino trade relationships. Trump came out of the meeting, stating that the meeting was “amazing”. From the first reports it seems that the US is to lower tariffs imposed on imports from China, China is to ease the restrictions of rare earths to the US and China is to restart massive purchases of US Soybeans among others.

Overall the meeting seems to have served as to agreeing a framework of a potential trade deal between the two superpowers and tends to act as to thaw tensions in the US-Sino trade relationships. On the negative side, there seems to be a lack of structural changes, while the actual agreement is still to be formed.

In any case the direction currently seems to be towards an improvement that could lead to an increase of economic activity and oil thus oil demand and the improved market expectations and optimism could provide some support for oil prices.   

The state of the US oil market

Continuing with the state of the US oil market, Baker Hughes last Friday reported an increase of active US oil rigs in a signal of possibly increased oil demand in the US economy which could serve as a bullish signal for oil prices. On Tuesday API reported a drawdown of -4.0 million barrels, showcasing that oil demand surpassed oil production in another bullish signal for oil.

Yesterday we got another bullish signal as EIA reported an even wider drawdown of US oil inventories than API, of -6.858 million barrels. Should we see further depletion of US oil inventories in the coming week, we may see oil prices getting some support.     

The Fed cuts rates again but limits the easing?

The Fed as was widely expected cut rates by 25 basis points yesterday, yet Fed Chairman Powell set doubts on the December meeting expected rate cut. At the moment the market has eased its expectations for the bank to continue easing its monetary policy yet they are still there.

In any case we expect the rate cut yesterday to ease financial conditions in the US economy further that could lead to increased economic activity and thus increase demand for oil, supporting the commodity’s price. Yet such expectations for an increase in oil demand could be moderated should Fed policymakers start stressing their doubts for the necessity of an extensive rate cutting path.

OPEC’s intentions for oil production and US sanctions on Russian oil

Reports are highlighting the possibility of OPEC actually leaning on another oil production hike, yet as the last one also rather modest. Specifically Reuters sources spoke of another 137k barrels per day (bpd) oil production increase in December, a decision which follows a similar oil production hike for November.

News of the oil producers’ organisation hiking production levels, tends to weigh on oil prices as it increases oil supply.      

Ther e is nothing new that the US has sanction Russian oil, what is new is that the German branch of Rosneft (sanctioned Russian oil company) has been exempted, in what seems to be a crack in US sanctions. Indian refineries seem to have halted the import of Russian oil until they get a green light to proceed from the Indian Government, while at the same time International Energy Agency (IEA) General Secretary Birol stated that the effect of the US sanctions is to be limited because of surplus capacity that can make up for the lost oil quantities.

Under normal circumstances the US sanctions could provide support for oil prices, as they theoretically limit the supply of the commodity in the international markets.  

Oil Technical Analysis

WTI Cash Daily Chart

• Support: 59.50 (S1), 56.00 (S2), 51.40 (S3)
• Resistance: 62.40 (R1), 66.20 (R2), 70.00 (R3)

Since our last report WTI’s price action dropped and tended to stabilise since Tuesday as it test the 59.50 (S1) support level. For the time being, we expect the price action of the commodity to stabilise somewhat and note that the RSI indicator seems to be currently running along the reading of 50, implying a relative indecisiveness on behalf of market participants that could allow the sideways motion to be maintained.

Also we note that the Bollinger bands have narrowed, implying an easing of volatility for WTI’s price-action. Should the bears take over, we may see WTI’s price action dropping below the 59.50 (S1) support line and continue to break also the 56.00 (S2) support level.

On the flip side, should the bulls be in charge of WTI’s price action we may see it breaking the 52.40 (R1) resistance line and start aiming for the 66.20 (R2) resistance level.   

إخلاء المسؤولية:
This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked in this communication.

The post Oil Outlook: Oil in the midst of conflicting fundamentals appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.

US takes aim at Russian oil companies

The US has imposed sanctions on Russia’s two biggest oil companies, notably Rosneft and Lukoil in an apparent attempt to increase pressure on the Russian Government to come to the negotiation table in regards to the ongoing war in Ukraine.

It appears that the US is making good on their promise to attempt to curb Russian oil flows into the international market, in an attempt to further weaken their economic standing which in turn may increase pressure on Russian President Putin to enter viable peace talks with Ukraine in order to enter the war.

Moreover, the sanctions on Russian oil companies could restrict the supply of Russian oil into the market, which could aid oil prices. Furthermore, according to Reuters, India is poised to sharply reduce their imports of Russian oil in order to comply with new US sanctions and could thus further reduce the supply of Russian oil into the global market.

In our view, this is not just to comply with the sanctions but also a play to appease Washington, which has threatened India with a 50% tariff on its exports to the US in part as a result of their purchasing of Russian oil. Nonetheless, in our view, the sanctions and reduction of Russian oil in the market may continue as the US continues to pressure Russia economically.

Yet, a main hurdle will be China and whether the US will be able to convince the economic behemoth to reduce their oil imports. In conclusion, as a result of the recent developments, oil prices could potentially move higher for the time being, although we should note that in the event of possible peace talks being announced, oil prices may face renewed bearish tendencies.

The Donroe Doctrine

As the paragraph headline states, the Donroe Doctrine is a twist on the Monroe Doctrine aimed at showcasing President Trump’s foreign policy agenda in the America’s. Particularly in Venezuela, where the US military buildup continues, with the US continuing their strikes on alleged cartel members in the region.

Nevertheless, tensions are still elevated in the region with The Guardian reporting that another special unit of the US military has been deployed to the region. In turn, should a full-scale military operation occur in Venezuela or should they attempt to overthrow the incumbent government oil prices may find some support as the tensions could also spill over into the oil producing nation of Guyana. Overall, we remain vigilant to developments in the region and how they may play out.

US-China to discuss trade on Friday

The US’s and b very public trade spat has moved into the shipping world as we had mentioned in last week’s oil report edition. According to a news flash by Bloomberg, China has stated that trade talks with the US have been set for Friday in Malaysia.

In turn, the developments that trade talks between the two nations may occur, could ease market worries about the international maritime world as was seen following the imposition of port fees from both sides.

However,  we are slightly pessimistic as to what actually can be achieved between the two nations on their talks on Friday, with our view being that they may agree to an extension of their existing trade truce that was signed in Switzerland earlier on this year.

Oil Technical Analysis

WTI Cash Daily Chart

• Support: 58.90(S1), 55.25 (S2), 52.00 (S3)
• Resistance: 61.75 (R1), 66.15 (R2), 69.70 (R3)

Since our last report the WTI appears to have reversed trajectory with the commodity’s price having currently tested our 61.75 (R1) resistance level, which we had noted in last week’s report as R2.

We now change our outlook for the commodity in favour of a bullish one, and supporting our case is the MACD indicator, in addition to the RSI indicator below our chart, which currently registers a figure near 50, yet considering it was near to 30 the recent rise may showcase that the bearish momentum could have faded away. For our bullish outlook to continue we would require a clear break above our 61.75 (R1) with the next possible target for the bulls being our new 66.15 (R2) resistance level.

On the other hand, for a sideways bias we would require the commodity’s price to remain confined between our 58.90 (S1) support level and our 61.75 (R1) resistance line. Lastly, for a sideways bias we would require a clear break below our 58.90 (S1) support level with the next possible target for the bears being our 55.25 (S2) support line.

إخلاء المسؤولية:
This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked in this communication.

The post Oil Outlook: The Oil battlefield takes shape appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.

India pledges to halt Russian oil imports, Trump says

One of the most prevailing developments in the oil markets is President Trump’s announcement that India’s Prime Minister has promised that they will halt Russian oil imports. Specifically, President Trump stated that “I was not happy that India was buying oil, and he assured me today that they will not be buying oil from Russia”, referring to a phone call he had with Prime Minister Modi on Wednesday.

The statement by President Trump could influence oil prices in the near term considering that India is one of Russia’s largest oil buyers and thus a decision to halt Russian oil imports could result in a reduction of the supply into the global oil markets, which in turn may aid oil prices.

However, New Delhi in response to President Trump’s announcement has apparently refused to confirm the comments made by the US President, which tends to raise questions as to how committed they are to halting Russian oil imports. From our perspective, we see the case for New Delhi to appease the US President by agreeing to reduce their oil imports from Russia, yet the question remains as to how far that may go.

Moreover, considering Russia’s extensive shadow fleet of oil tankers, could a possible halting of Russian oil imports be superficial in nature?. Those questions remain unanswered at this point in time and thus we are eager to see as to how this particular situation plays out.

However, from a market perspective should it appear that India may be truly halting Russian oil imports it could possibly aid oil prices. Whereas, should the process be dragged out or even denied by India the market could assume that it’s business as usual, which in turn may fail to materially influence oil prices.

Venezuela regime change inbound?

Venezuela and the US are still not on the friendliest of terms with President Trump confirming this week that he had authorized CIA activities within Venezuela. Furthermore, when asked about the statement, the US President replied by stating that he authorized the CIA to operate for two reasons, with the first one being due to Venezuela having “emptied their prisons into the United States of America” and the second “ and the other things are drugs”.

In our opinion, the CIA conducting operations in Venezuela is not a surprise considering the large-scale military buildup by the US in the region, but the Commander in Chief’s confirmation that he authorized operations to occur is a very public statement and what surprised us the most.

We should note that there have not been talks about a possible regime change, yet considering what we know the US could proceed with such an avenue if they wished to do so. Overall, should a military conflict occur in the region, Guyana who is Venezuela’s neighbour and a large oil exporter could be dragged into the conflict considering Venezuela’s territorial ambitions in the Essequibo region. Hence, any military conflict could possibly aid oil prices.

US-China trade spat moves into the shipping world

The US’s and China’s very public trade spat has moved into the shipping world. For context, on the 14^th of October, U.S authorities begun charging ships of Chinese owners or operators $50 per net tonne of goods they bring to American ports, with China’s countermeasures being 400 yuan or roughly $56 per net tonne which also came into play on the 14^th of October.

Hence the ongoing maritime battle between the world’s largest economies could increase manufacturing costs and may dampen manufacturing activity should the maritime spat be prolonged. Hence, a possible dent in manufacturing could result in a reduction for demand of oil and may thus weigh on oil prices in the future depending on how long this plays out.

Oil Technical Analysis

WTI Cash Daily Chart

• Support: 55.25 (S1), 51.95 (S2), 49.10 (S3)
• Resistance: 58.90 (R1), 61.75 (R2), 64.50 (R3)

Since our last report the WTI appears to have moved lower. We opt for a bearish outlook for the commodity and supporting our case are all three indicators below our chart which tend to showcase a bearish market sentiment. Specifically, the RSI indicator being close to 30, the MACD and ADX where the -DI is greater than the +DI.

Moreover, on our chart we are also using the Ichimoku indicator which tends to support our bearish outlook. For our bearish outlook to be maintained we would require a break below our 55.25 (S1) support level with the next possible target for the bears being our 51.95 (S2) support line.

On the flip side for a bullish outlook we would require a clear break above our 58.90 (R1) resistance line with the next possible target for the bulls being our 61.75 (R2) resistance line. Lastly, for a sideways bias w would require the commodity’s price to remain between our 55.25 (S1) support level and our 58.90 (R1) resistance line.

إخلاء المسؤولية:
This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked in this communication.

The post Oil Outlook: Will India really stop buying Russian oil appeared first on Complete Turnkey Introducing Brokers (IB) Solution at IronFX.