Oil Tries To Rebound, But Oversupply And Politics Keep The Lid On
Key Points
- Brent and WTI opened the week higher, but both remain trapped under heavy technical resistance.
- The last seven days swung from sanctions-enforcement headlines to year-end de-risking and “too much oil” math for 2026.
- Traders are pricing geopolitics as a short-term premium, while forecasts of rising inventories define the medium-term ceiling.
Crude began Monday with a modest bounce after last week’s selloff, leaving Brent near $60.9 a barrel and WTI around $57.3, both up roughly 1% on the session and keeping a Brent premium of about $3.5.
The move looked more like stabilization than a decisive turn, with trading still dominated by thin year-end liquidity and a market that has struggled to hold rallies throughout December.
The past week’s story was a tug-of-war between geopolitics and oversupply. On Dec. 22, tanker-enforcement headlines tied to Venezuelan flows briefly revived supply-risk hedging.
Into Dec. 23–24, prices held up in choppy holiday conditions, then fell hard on Dec. 26, when traders refocused on 2026 surplus risks and the possibility that a credible Ukraine peace track could, over time, loosen constraints on Russian barrels. Weekend positioning only reinforced the cautious tone.
Market commentary this morning captured that split. Analysts pointed to continued strikes on energy infrastructure and persistent Middle East tension as reasons risk premiums keep resurfacing.
Bearish Outlook Keeps Oil Rangebound
Yet even desks that acknowledge headline risk argue it has not changed the central problem: too much supply relative to expected demand next year.
Widely cited projections include a large 2026 surplus near 3.8 million barrels per day, alongside expectations for rising inventories and weaker average prices into early 2026, with some forecasts putting Brent around $55 in the first quarter.
Positioning and flows echo the mood. NYMEX crude volume around Dec. 24 was reported near 248,000 contracts, with open interest about 1.90 million, down roughly 38,500.
Oil ETF signals were small but positive, with one weekly snapshot showing a roughly $2.21 million net inflow into USO, and USO trading in multi-million share days, including about 4.22 million shares on Dec. 26.
Technically, both benchmarks still read as “range repair.” On your charts, 4-hour and daily RSI sit in the mid-to-high 40s, while MACD remains below zero but is improving.
For Brent, the market needs to reclaim the 62.3–62.6 zone to argue for a trend change; support sits near 60.4 and 60.0. For WTI, the behavior fits a $55–$60 band, with resistance layers near 57.6–58.4 and a higher ceiling near 60.
Next catalysts are familiar: concrete progress in Ukraine talks, any escalation in enforcement around Venezuelan exports, and the first post-holiday return of liquidity that will test whether this bounce is real buying or just the absence of sellers.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error