Headwinds persist for oil, but downside looks limitedHeadwinds persist for oil, but downside looks limited
Technical factors
Oil continues to form lower swings. Although there has been a rebound, it lacks sustained momentum, suggesting it may be only a temporary bounce; the lower-swing structure and bearish EMAs still signal a downtrend.
However, the downtrend is also losing strength, as evidenced by the price hasn’t set a new low for seven months. Therefore, if the price breaks to new lows, the downside may be limited, as momentum looks waning.
If USOIL falls from here and breaks the previous low at 55.00, the price could fall toward 50.00.
Conversely, if the pullback holds above the support at 58.00, the price may build a base before breaking above the higher peak at 62.50, targeting resistance at 66.50.
Fundamental factors
A key headwind remains supply growing faster than demand. OPEC+ members plan to raise output, stoking oversupply concerns, compounded by the U.S. accelerating production and reducing reliance on foreign supplies due to increased domestic output—currently a net import of crude oil as of October 2025, with net imports around 1.7 million barrels per day, the lowest since 1971.
U.S. crude inventories continue to rise, signaling softer domestic demand alongside higher imports.
Global economic growth is slowing, weighing on oil demand, particularly from China and other major economies.
A stronger U.S. dollar makes dollar-priced oil more expensive for other countries, dampening overall demand.
Analysis by: Krisada Yoonaisil, Financial Markets Strategist at Exness
