West Texas Intermediate (WTI) crude oil trades at $59.25 during the Asian session, slipping due to rising US Dollar demand. The price of WTI is capped, owing to geopolitical tensions and OPEC’s decision to maintain output levels in early 2026.

WTI approached a support level of $59.24 with slight resistance at $60.80. Ukraine’s attacks on Russia have led to suspensions in Novorossiysk, while OPEC+ has paused its efforts to regain market share due to supply concerns.

Technical Analysis

On the daily chart, WTI remains below the 100-day EMA at $61.55, showing a bearish bias. It stabilises around the 20-day average at $59.24, with narrowed Bollinger Bands indicating less volatility. The RSI at 49.10 shows a neutral outlook with potential for either direction.

WTI trades within a range, with resistance between $60.80 and $61.55, and support from $59.24 to $57.69. Remaining above the mid-line sustains interest, while dropping below could lead to further losses.

Global factors such as supply and demand, political events, and the US Dollar’s strength affect WTI prices. Weekly inventory reports from the API and EIA provide insight into oil supply and demand dynamics, influencing prices accordingly.

With WTI crude oil trading around $59.25, we are seeing a bearish outlook take hold as the price remains below key moving averages. The current market is defined by low volatility and consolidation, suggesting a significant price move could be on the horizon. Traders should prepare for a potential breakout from the tight range between the $57.69 support and the $60.80 resistance.

Macro and Geopolitical Overview

The downward pressure is supported by a strengthening US Dollar, with the Dollar Index (DXY) recently climbing to a multi-month high of 106.5, making oil more expensive for foreign buyers. Furthermore, last week’s report from the Energy Information Administration (EIA) on November 26, 2025, showed a surprise build in crude inventories of 1.8 million barrels, signaling weaker-than-expected demand. We see these factors as the primary drivers of the current bearish sentiment.

Looking at the broader economic picture, recent data from Europe and China points to slowing industrial activity, which dampens the forecast for global energy demand heading into 2026. China’s latest Caixin Manufacturing PMI, for instance, came in at 49.9, marking a slight contraction that raises concerns. This contrasts with the more optimistic growth forecasts we held earlier in 2025.

However, we believe the downside is limited by ongoing geopolitical tensions and OPEC+ discipline. The attacks on Russian energy facilities are a constant reminder of supply vulnerability, creating a floor under the price. The cartel’s decision in November 2025 to maintain production cuts through the first quarter of 2026 demonstrates a commitment to preventing a price collapse similar to what we witnessed in late 2023.

Given this setup, a prudent strategy for the coming weeks would involve positioning for a volatility expansion. Selling out-of-the-money call options with strike prices above the $61.55 resistance could capitalize on the current range-bound price action. Alternatively, traders could use the upcoming API inventory report as a catalyst, preparing to buy put options if WTI closes decisively below the $59.24 midline support.

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