oil Market Remains Sensitive to Geopolitical & Trade Developments
The oil market demonstrated a cautious optimism Monday, largely influenced by developments in the Middle East and ongoing trade dynamics between the U.S.and China. sentiment was bolstered by Hamas freeing the final 20 surviving Israeli hostages as part of a U.S.-brokered ceasefire agreement. However, the market remained sensitive to potential disruptions, with a focus on whether the U.S. would avoid actions that could “hurt” China.
crude oil prices initially opened lower at $59.00 on Sunday, but partially recovered, reaching a high of $60.17 in overnight trading before settling into a sideways pattern. The November WTI contract closed up 59 cents at $59.49, while the December Brent contract also gained 59 cents to settle at $63.32. Product markets followed suit, with heating oil increasing by 4.53 cents to $2.2497 and RB gaining 2.34 cents to $1.8438.
Technical Outlook:
Tuesday’s trading is expected to continue within the established sideways range, reflecting the market’s current uncertainty. Traders are closely monitoring the evolving situation in the Middle East following the ceasefire, alongside developments in U.S.-China trade relations and the ongoing conflict in Ukraine. President Trump’s comments regarding Iran’s nuclear program, delivered during a speech to Israel‘s parliament, are also being factored into market assessments.
Key support levels for the crude market are identified at $59.00, $58.22, $57.71, $57.50, $57.03, and $55.30. Resistance levels are seen at $60.17, $60.52, $61.09,$61.67, $62.87, and $62.92.
geopolitical & Economic Context:
During a joint address to Israel’s parliament with U.S. President Donald Trump, Israeli Prime minister Benjamin Netanyahu emphasized his commitment to peace and praised the U.S. President’s role in securing the release of Israeli hostages. President Trump subsequently traveled to Sharm el-Sheikh, Egypt, to chair a summit with over 20 world leaders aimed at solidifying the truce between Israel and Hamas, declaring it ”a great day” for peace. The Israeli military confirmed the receipt of all 20 living hostages released by Hamas on Monday, marking a significant step towards potentially ending two years of conflict in Gaza.
OPEC+ Supply & Demand:
OPEC maintained its forecasts for global oil demand growth, projecting an increase of 1.3 million barrels per day (bpd) this year and a slightly faster rate in 2026. The organization also indicated a potential reduction in the oil market supply deficit in 2026, attributed to increased output from the wider OPEC+ group.OPEC+ increased crude output by 630,000 bpd in September, reaching 43.05 million bpd. Based on this output level,OPEC estimates a supply deficit of 50,000 bpd in 2026,a smaller deficit than the 700,000 bpd projected in the previous month’s report.
Early Market call (8:50 AM EDT):
Despite the previous day’s gains, early trading indicated a downward correction.
* WTI – Nov $58.05, down $1.51
* RBOB – Nov $1.8193, down 2.81 cents
* HO – nov $2.1983, down 5.29 cents
