Oil Caught Between OPEC+ Discipline and Global Oversupply

Key Takeaways:

*The group’s modest November production increase (+137k bpd) and Saudi Arabia’s unchanged OSP to Asia signal continued supply discipline aimed at preventing sharp price swings.

*The WTO’s downgrade of trade growth to 0.5% for 2026 and muted consumption from China and Europe point to constrained demand growth.

*Middle East instability and Ukrainian attacks on Russian energy infrastructure keep a floor under prices despite bearish fundamentals.

Market Summary:

Crude oil prices steadied in range-bound trade, balanced between cautious OPEC+ supply management and mounting fears of a global oversupply. The group’s modest 137,000 barrels-per-day production increase for November signaled continued discipline, while Saudi Arabia’s decision to keep its official selling price to Asia unchanged underscored a deliberate effort to prevent renewed price volatility. This restraint has provided a near-term floor for prices even as demand signals soften.

However, the supply picture remains overwhelmingly bearish. The U.S. Energy Information Administration lifted its 2025 output forecast to a record 13.53 million barrels per day, supported by robust gains in offshore and shale production. Non-OPEC+ producers such as Brazil and Guyana continue expanding output, while Russian exports remain elevated despite refinery disruptions. A reported 123-million-barrel global inventory build in September highlights persistent oversupply pressures, compounded by weaker refinery runs and softer trade flows from Asia.

On the demand side, the WTO’s downgrade of global trade growth to just 0.5% for 2026 underscores a sluggish macro outlook. China’s refinery activity has plateaued, and industrial fuel demand across Europe remains subdued. These trends suggest limited upside for crude consumption in the near term.

Even so, geopolitical flashpoints ranging from renewed Middle East instability to Ukrainian drone strikes on Russian energy assets are keeping downside risks contained. For now, oil remains locked in a fragile equilibrium: OPEC+ discipline and supply disruptions offer temporary stability, but surging non-OPEC output and slowing global demand continue to cap rallies and sustain a cautiously bearish tone heading into Q4.

Technical Analysis 

USOil, H4: 

WTI crude oil is consolidating near the $62.00 area after rebounding from the $59.95 support zone, struggling to regain traction above its short-term moving averages. The broader structure remains cautious, with prices confined below the $63.00–$64.25 resistance band and capped by the descending 100-period SMA, which continues to pressure upside momentum. A sustained move above $64.24 would confirm a near-term bullish reversal, exposing the next resistance at $65.90 and potentially $68.00, whereas failure to reclaim $63.00 risks another pullback toward $59.95.

RSI stands at 54, indicating mild recovery momentum without clear overbought conditions, while MACD has turned slightly positive with a tentative bullish crossover suggesting early signs of renewed buying interest, though conviction remains limited.

Overall, crude oil’s bias remains cautiously neutral-to-bullish, with consolidation likely to persist unless a breakout above $64.25 materializes. Traders will closely watch U.S. inventory data and macro risk sentiment for directional cues, as the market continues to weigh global demand outlook against ongoing geopolitical tensions.

Resistance level: 63.00, 64.25

Support level:61.90, 59.95