Crude oil prices are experiencing heightened volatility at this stage, having risen by around 6% from last week’s low of USD 58.72 to a peak of USD 62.17 reached on Monday, before currently trading around the USD 62 level. Nevertheless, prices remained down by approximately 17% since the beginning of the year to date.
It is true that oil prices have seen a recent rebound, driven by U.S. escalation and pressure on Venezuelan oil, as three oil tankers were detained within less than two weeks, in addition to the continued Ukrainian strikes on oil refineries in Russia. However, several bearish factors continue to weigh on crude oil prices, most notably:
- Ample oil supply from outside the OPEC+ countries, particularly from the United States, Canada, Brazil, and Guyana.
• The possibility of reaching a peace agreement between Russia and Ukraine amid ongoing negotiations and meetings involving the United States, Europeans, Ukrainians, and Russians.
• Weak economic data from major oil importers worldwide, especially China, which is weighing on global crude demand.
• Rising volumes of Iranian, Russian, and Venezuelan oil shipments accumulated at sea.
On the other hand, the positive factors that could support oil prices include:
- Weakness in the U.S. dollar index, which recorded 97.80 points today, its lowest level since October 3, 2025, providing oil prices with positive momentum given the inverse relationship between the two, alongside expectations of further dollar weakness in the coming period.
• Market expectations of two U.S. interest rate cuts next year, which could help boost oil demand.
From a technical perspective, crude oil prices are currently trading below the key support level represented by the 50-day moving average at USD 62.83. The next challenge lies in the potential decline toward the support level at USD 58.72, followed by a possible break lower toward USD 56, a level last seen on February 2, 2021.
As for the Relative Strength Index (RSI), it currently stands at 49 points, indicating the persistence of negative momentum in oil prices.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
