Today market outlook

[Zeologic]

Oil prices strengthen despite persistent supply surplus concerns

The XTI/USD oil price, an instrument that represents the price of WTI (West Texas Intermediate) oil against the USD, rose on Tuesday, drawing a long-bodied bullish candle with a small shadow at the bottom. Oil prices reached a high of 60.73, a low of 59.26, and closed at 60.61.

WTI traded up nearly 1.5% despite persistent supply surplus concerns. Traders appear to be more focused on the upcoming US sanctions against Russia, which target Rosneft and Lukoil, due November 21st.

Oil prices are influenced by supply and demand. If US crude oil inventory data declines and refinery utilization increases, this can support prices. For example, the EIA's continuous decline in US refinery inventories is a positive factor. Today, the EIA's economic calendar will release crude oil inventories, which are expected to show a decline of 1.9 million.

On the other hand, some analysts are paying attention to the latest projections from the International Energy Agency, which predict that the global oil market is on track for a period of oversupply, with non-OPEC output growth and softer demand potentially weighing on the balance until early 2026.

Besides supply and demand factors, geopolitical factors are also of concern to traders. Supply-side pressure can arise if geopolitical risks arise, such as sanctions against producing countries. For example, comments that sanctions against Russia could disrupt oil exports and increase spot premiums.

Although short-term conditions could support an increase, there are risks from global oversupply and slowing demand, which could depress prices.

Another factor that traders are paying attention to regarding oil prices is the relationship between the US dollar, interest rates, and the global economy. Because oil is traded in US dollars, a strengthening USD could depress prices by making it relatively expensive for holders of other currencies. A slowing global economy could also depress oil prices.

Currently, conditions appear to favor a consolidation phase or a slight upside rather than a major breakout to the upside or downside. This is due to the relationship between short-term supply and inventory, but also the constraints of oversupply and weak demand.

The forecast short-term price range is estimated at 58.50-61.50 per barrel. Key resistance is around 61.50-62.00; a breakout of this level could lead to a rise to 63.50. Key support is around 58.00-58.50; a breakout of this level could lead to further support at 55.00.