16 October 2025,02:28
Daily Market Analysis
16 October 2025, 02:28
*Crude oil remains rangebound as traders weigh tightening supply risks against weakening demand.
*U.K. sanctions and Trump’s comments on India phasing out Russian oil raise supply concerns, but markets doubt near-term disruption.
*U.S. and China growth softness continues to cap demand, overshadowing geopolitical risks.
Market Summary:
Crude oil prices are struggling to find equilibrium, trading within a tight range as investors weigh conflicting signals from geopolitics and fundamentals. On one hand, supply-side risks are intensifying following fresh U.K. sanctions targeting Russia’s oil majors and shadow tanker fleet, alongside President Trump’s claim that India will phase out Russian oil imports. These developments threaten to disrupt Russian export flows and potentially tighten global supplies. However, traders remain skeptical of the immediate impact given Moscow’s history of rerouting exports through alternative buyers and networks.
On the demand side, economic softness in the U.S. and China continues to overshadow supply disruptions. The Fed’s acknowledgment of downside risks to growth, coupled with the lingering effects of the trade war, has dampened industrial and freight activity, curbing energy consumption. The International Energy Agency’s warning of a record supply surplus in 2026, alongside OPEC+’s gradual restoration of production, has reinforced bearish sentiment. Structural indicators such as the WTI timespread flipping into contango point to a market already grappling with physical oversupply.
Although periodic geopolitical flare-ups may spark temporary rallies, the overarching narrative remains cautious. Without a meaningful rebound in demand or concrete proof that sanctions will significantly curb Russian exports, oil is likely to remain under pressure, with upside moves limited by an increasingly heavy supply backdrop and fragile global growth prospects.
Technical Analysis
USOIL, H4:
Crude oil remains under sustained pressure, extending its decline for a second week as sellers maintain control below the key $60.00 handle. The broader downtrend remains intact, with price action capped by the 20- and 50-period moving averages, both sloping downward signaling persistent bearish momentum.
On the momentum front, RSI hovers around 41, suggesting weak recovery attempts after a deeply oversold stretch. Meanwhile, the MACD remains below the zero line, though showing early signs of a potential bullish crossover, hinting at possible short-term stabilization.
Overall, the technical bias remains bearish unless oil can hold above $60.00 with follow-through buying. Failing that, momentum indicators point to further downside risk toward $57.90, in line with a broader risk-off tone across commodities.
Resistance Levels: 62.35, 67.15
Support Levels: 57.90, 51.40
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