Oil News: Bulls Target 50-Day MA After WTI Holds Support Zone for Third Day

WTI Edges Higher as Traders Weigh Sanctions Risk Against Supply Glut

Light crude oil futures are edging higher for a third straight session on Tuesday, extending their rebound after posting a short-term bottom at $58.83 last week. That low came inside the 50% to 61.8% retracement zone at $59.27 to $58.49 — but the market has since crossed to the strong side of that zone, signaling potential bullish intent.

At 12:57 GMT, Light Crude Oil Futures are trading $60.51, up $0.38 or +0.63%.

Prices are now pressing up against the 50-day moving average at $61.00, which has capped rallies for the past three weeks. A sustained move above this level would shift near-term sentiment more decisively in favor of the bulls. Beyond that, the 200-day moving average at $61.63 stands as the next key resistance. Clearing that opens the door for a potential run at the long-term pivot at $63.74 — but without a fresh catalyst, that move may stall.

Sanctions Prop Up Products While Crude Battles Supply Fears

Traders are caught between two competing forces: tightening refined fuel markets due to new U.S. sanctions on Russia, and the growing drumbeat of oversupply.

On the sanctions front, the big story is Lukoil declaring force majeure at an Iraqi oil field — the most visible fallout from last month’s U.S. action targeting major Russian producers. The result? Crude remains sluggish, but refined products are flying. European diesel margins surged past $31.50 per barrel, a 21-month high. Gasoline profit margins are also ripping, now at levels not seen in 18 months.

Analysts say restricted exports of heating oil, gasoil, and RBOB gasoline are keeping a bid under the products market, even as the crude complex struggles with too much supply. That divergence is keeping spreads active and fueling speculative plays across the curve.

OPEC+ Output Hangs Over Market Like a Wet Blanket

The fundamental headwind remains the same: too much crude. OPEC+ is still on track to add 137,000 barrels per day in December, and while the group plans to pause increases in Q1, there’s talk of reversing voluntary cuts next year — which could flood the market with another million barrels per day.

Add to that the growing pile of crude floating offshore Asia — a sign that barrels aren’t finding homes fast enough — and it’s no surprise that rallies are stalling near key technical zones.

Bottom Line: Bulls Need a Clean Break Above the 200-Day

The short-term bias remains bullish as long as WTI stays above the retracement zone, but the real test is whether buyers can force a breakout above the 50-day moving average at $61.00 — and more importantly, the 200-day at $61.63. A decisive move above both levels could open the door to $63.74 and shift sentiment more firmly in favor of the bulls. Until then, rallies risk stalling without a solid catalyst.

More Information in our Economic Calendar.