Oil News: Will Demand Hopes Clash with Supply Fears at 52-Week Moving Average?

WTI Crude Rallies as Geopolitical Tensions Offset Bearish Inventory Outlook

Light crude oil futures posted modest gains last week, settling at $60.09, up $0.34 or +0.57%, as supply-side concerns and technical buying helped the market stabilize after a sharp midweek sell-off.

While global inventory data and revised supply forecasts from OPEC and the IEA weighed heavily on sentiment, Friday’s rebound was driven by rising geopolitical tensions and a short-covering rally triggered by technical signals.

Inventory Build Reinforces Oversupply Concerns

The most bearish development of the week came from the U.S. Energy Information Administration, which reported a 6.4 million barrel build in crude stocks—well above expectations for a 1.96 million barrel rise.

This confirmed earlier API estimates and added to concerns that global supply continues to outpace demand. Additional builds were reported in storage hubs across Europe, Singapore, and Fujairah, reinforcing the narrative that excess barrels are struggling to find buyers.

OPEC’s latest oil market report also contributed to the bearish tone, forecasting a surplus in 2026 due to increased output from OPEC+ members, including Russia.

The IEA echoed this view by raising its supply growth projections for 2025 and 2026.

Combined with the EIA’s forecast for record U.S. production this year, the tone among major agencies has shifted toward acknowledgment of a persistent oversupply problem heading into the mid-decade period.

Russian Port Attack Fuels Short-Term Rebound

Despite the heavy inventory pressures, the market rallied sharply on Friday following a Ukrainian drone attack on Russia’s Novorossiysk port. The incident damaged oil infrastructure and halted exports from a terminal that handles over 700,000 barrels per day. While no long-term disruption has been confirmed, the event injected fresh geopolitical risk into the market, triggering a wave of short-covering.

The impact was compounded by mounting sanctions against Russian producers, with Lukoil forced to declare force majeure at an Iraqi oil field. The tightening restrictions, which take full effect after November 21, are expected to increase logistical strain, potentially lifting prices if exports are delayed or diverted into floating storage.

Weekly Technical Picture Suggests Key Resistance Ahead

From a technical standpoint, last week’s bounce off support at $58.12 signals a possible short-term bottom. Prices finished above Fibonacci support at $59.44 and the minor 50% retracement at $58.28.

However, the real test lies ahead: the 52-week moving average at $62.25 remains a major resistance level and has rejected rallies for the past month. A break above this barrier would be required to shift the intermediate outlook bullish and target the long-term pivot at $63.74.

Until then, the market remains vulnerable to renewed selling if resistance holds and fundamentals remain unsupportive.

Outlook: Cautiously Bullish Near-Term, But Long-Term Headwinds Remain

The short-term bias for WTI crude is cautiously bullish following the technical rebound and heightened geopolitical risk. However, traders remain wary of the structural oversupply, as reflected in swelling inventories and revised agency forecasts.

A decisive breakout above the 52-week moving average at $62.25 would be needed to confirm broader upside potential. Otherwise, expect rallies to struggle without sustained fundamental support.

More Information in our Economic Calendar.