Facts:
- OIL.WTI retested the 50-day exponential moving average.
- At the same time, the 200-day EMA continues to slope downward.
Recommendation:
Short position on OIL.WTI at market price
- SL: 63.50
- TP: 56.30
Opinion:
OPEC+’s decision to only moderately increase production in December and its announcement to suspend increases in the first quarter of 2026 do not change the structural risks of oversupply, which clearly determine the sentiment on the commodity market. The International Energy Agency estimates that the global oil market could see a surplus of up to 4 million barrels per day in 2026, while demand growth in Asia remains anemic and industrial data from key economies in the region does not improve the picture. In addition, record oil production in the US (13.8 million barrels per day) ensures stable supply and weakens growth potential, even with occasional disruptions caused by sanctions on Russia or attacks on its infrastructure.
Recent months have confirmed the dominance of bearish sentiment, despite the current rebound. In our opinion, the unfavorable supply and demand balance and neutral institutional forecasts may continue the downward trend that has been evident in WTI for a long time.
We would like to remind you that OIL.WTI is characterized by very high volatility, so it is worth exercising particular caution when analyzing this commodity. We have set a stop loss order at the 100-day EMA zone, which in the recent past has been a key barrier for bulls (just at the 2-standard deviation Bollinger Band from the last 14 sessions). The take profit order is located in the October lows zone.
Source: xStation
