Oil News: Crude Futures Slip as Rally Stalls Below 200-Day Moving Average Resistance

Light Crude Pulls Back After Short-Covering Rally Stalls at Technical Resistance

Light crude oil futures are slipping Tuesday after a short-covering bounce lifted prices to $62.12 on Monday. The move higher has been capped by stiff resistance near the 200-day moving average at $63.03 and the 50-day moving average at $63.33, which traders are watching closely.

While minor downside support rests at $60.40, the more significant level is the 61.8% Fibonacci retracement at $59.91, which could be tested if bearish momentum resumes.

At 10:23 GMT, Light Crude Oil Futures are trading $61.55, down $0.14 or -0.23%.

OPEC+ Output Hike Falls Short of Market Expectations

Crude prices found modest footing earlier in the week after OPEC+ agreed to raise output by just 137,000 barrels per day starting in November—a smaller-than-expected move.

Analysts had feared a more aggressive return of supply, but the restrained increase suggests the group is still cautious, especially with forecasts pointing to a global surplus in the fourth quarter.

Brent’s $5 pullback last week reflected earlier supply fears, but the mild rebound has not yet altered the forward curve, which remains in backwardation. Russia’s Deputy PM confirmed no further quota changes were discussed beyond November.

Russian Refinery Attack Adds Risk Premium to Market

Supply risks continue to hover over the market, particularly after Russia’s Kirishi refinery halted its top distillation unit due to a drone strike and fire, likely sidelining production for a month.

The disruption highlights persistent geopolitical threats that could affect physical supply, even if OPEC+ and broader fundamentals lean bearish. While this single incident hasn’t yet sparked a sustained rally, traders remain alert to further disruptions in Russian output.

China Expands Strategic Oil Reserves as Stockpiling Accelerates

In a move that may offer medium-term price support, China is expanding its strategic petroleum reserve (SPR) by 169 million barrels via 11 new storage sites.

Though labeled “commercial,” the facilities—operated by state-owned firms like Sinopec and PetroChina—are widely seen as emergency stockpiles.

This push reflects Beijing’s continued effort to secure supply and could absorb some excess global output in the near term, though it’s unlikely to offset bearish fundamentals completely.

Falling Oil Prices Pressure Big Oil’s Buyback Pledges

With Brent crude falling below $65 last week, oil majors are under pressure. Payout-heavy strategies may become unsustainable without higher prices, with most firms requiring Brent above $80 to maintain current dividend and buyback programs.

Chevron, BP, and TotalEnergies have already trimmed buybacks, while Total plans $7.5 billion in cost cuts. Job reductions and capital discipline are spreading across the sector, reflecting the strain of weaker prices and limited upside.

Outlook: Bearish Bias as Supply Risks Fail to Overcome Resistance

Despite a cautious OPEC+ stance and isolated geopolitical risks, the broader oil prices forecast remains bearish.

Technical resistance at key moving averages is holding, and support near $59.91 remains vulnerable if bearish sentiment persists.

Rising global supply, shrinking corporate buybacks, and weakening demand conditions suggest crude could retest recent lows unless new supply shocks materialize.

More Information in our Economic Calendar.