Oil News: Futures Edge Higher as Middle East Tensions Override Inventory Concerns

Crude Consolidates Under Critical Moving Average as Headlines Drive Action

Light crude oil futures are edging higher on Tuesday as prices continue to consolidate just under the 50-day moving average at $58.76, which is both resistance and a potential trigger point for an acceleration to the upside.

Today’s price action is being fueled by headlines as investors react to dampening hopes of a Russia-Ukraine peace deal and escalating geopolitical tensions in the Middle East around Yemen.

At 13:48 GMT, Light Crude Oil Futures are trading $58.31, up $0.23 or +0.40%.

Geopolitical Tensions Fuel Modest Rally

On Monday, prices rose more than 2% as Saudi Arabia launched airstrikes against Yemen and after Moscow accused Kyiv of targeting Putin’s residence, weakening hopes of a peace deal. Ukraine denied Moscow’s accusation, but damage may have already been done to the peace negotiations process. U.S. President Donald Trump said he was angered by details of the alleged attack after speaking with Putin on the telephone.

Short-Covering Emerges as Peace Hopes Fade

The supply/demand situation is bearish but the current price action suggests the weakest short-sellers are beginning to believe peace is going to become very hard to come by, encouraging them to cover their positions.

More supply concerns were added to the mix on Monday following air strikes by a Saudi Arabia-led coalition on what is described as foreign military support to UAE-backed southern separatists in Yemen. Reuters is reporting that the coalition has asked UAE forces to leave Yemen as tensions mount between the two Gulf oil powers.

Investors also assessed another Middle East development after Trump warned the United States could support another major strike on Iran were Tehran to resume rebuilding its ballistic missile or nuclear weapons programs.

Despite persistent fears of potential supply disruptions, perceptions of an oversupplied global market remain and could continue to keep a lid on prices. The growing supply glut could cap prices and send them trending lower once again at the start of 2026.

Key Moving Averages Hold the Cards for Direction

Technically, it all comes down to the reaction to the 50-day at 58.76 and 200-day moving average at 60.47.

The 50-day MA is the immediate threat to the current rally. It has helped cap gains since October. Overcoming it will indicate that traders are putting more weight on a supply disruption than previously expected, encouraging short-covering and hitting buy stops.

Resistance will rotate higher if the 50-day MA is recovered with the next headwind the 200-day MA at $60.47.

On the downside, minor support at $57.60 and $56.65 are helping to prop prices up. We don’t know enough to call it outright buying yet, but it certainly looks as if the heavy selling pressure has subsided at current price levels.

More Information in our Economic Calendar.