US crude oil futures struggled below the 50-day moving average as Russian supply recovered.
2025-11-18 21:58:25
On Tuesday (November 18), WTI crude oil futures rose slightly during the European session, but remained within the wide trading range of last Friday, indicating that market confidence was limited as traders assessed the latest supply dynamics and the risks of Russian sanctions.
Currently, US crude oil is in a range-bound trading phase, with strong resistance from moving averages above. If it fails to break through the 50-day moving average ($61.04), it will likely continue its downward trend. If it breaks through unexpectedly, the resistance level of the 200-day moving average ($63.00) should be monitored. On the downside, the support levels to watch are $58.43 (0.236 Fibonacci retracement) and $56.85 (lower Bollinger Band).
Oil prices edged lower during the session as market attention shifted to the rapid resumption of Russian crude oil supplies at the Novorossiysk hub. Loading operations at the port resumed faster than expected after attacks by Ukrainian drones and missiles.
Oil Price Forecast: Russian Supply Recovery Remains a Focus
Loading operations at the port of Novorossiysk resumed on Sunday after a two-day suspension, which temporarily reduced daily market supply by approximately 2.2 million barrels. This supply disruption pushed crude oil prices up more than 2% on Friday, but confirmation of the resumption of supply on Tuesday morning put downward pressure on prices. Traders continue to focus on whether US and Western sanctions will more significantly curb Russian exports in the coming months.
The U.S. Treasury Department has noted that sanctions imposed in October on Rosneft and Lukoil have begun to squeeze Moscow's revenues, while ANZ Research points out that the discount on Russian crude oil is widening. However, several analysts emphasize that Russia has historically demonstrated its ability to adapt to sanctions, meaning that unless sanctions are further tightened, supply disruptions will only be temporary.
China's reserves are accelerating.
Latest data shows that China's crude oil inventories increased significantly in October, with an estimated daily surplus of 690,000 barrels, due to imports and domestic production exceeding refinery processing capacity. This compares to a daily surplus of 570,000 barrels in September, highlighting China's strategy of increasing reserves when oil prices are considered favorable.
In October, China's crude oil imports totaled 11.39 million barrels per day, while production was 4.24 million barrels per day. The total amount of crude oil available for refineries to process was 15.63 million barrels per day, while refineries actually processed 14.94 million barrels per day. In the first ten months of this year, the average daily surplus was close to 900,000 barrels, further strengthening China's role as an informal stabilizer of the global supply and demand balance.
Oil Price Forecast: Goldman Sachs Warns of Multi-Year Supply Surge
Goldman Sachs reiterated that a significant supply glut will emerge in 2026 due to the completion of long-cycle projects and the gradual lifting of production cuts by OPEC+.
(WTI crude oil daily chart source: FX678)
The bank projects Brent crude to reach $56 per barrel and West Texas Intermediate (WTI) crude to reach $52 per barrel in 2026, significantly lower than current forward curve levels. Goldman Sachs notes that the daily supply surplus will widen to approximately 2 million barrels and persist into next year. The International Energy Agency (IEA) similarly predicts that the supply surplus could exceed 4 million barrels per day by 2025.
Goldman Sachs stated that Brent crude oil prices could fall to the $40 range if an economic recession occurs, but also emphasized that oil prices could exceed $70 per barrel in 2026-2027 if Russian production declines significantly.
Conclusion: Bearish outlook in the short term.
With Russian exports recovering, China absorbing excess supply at an uneven pace, and major institutions warning of a continued oversupply, the short-term outlook for crude oil is bearish. The current range-bound trading pattern, constrained by moving average resistance, reflects market preparation for further downward pressure unless new supply disruptions occur.
Currently, US crude oil is in a range-bound trading phase, with strong resistance from moving averages above. If it fails to break through the 50-day moving average ($61.04), it will likely continue its downward trend. If it breaks through unexpectedly, the resistance level of the 200-day moving average ($63.00) should be monitored. On the downside, the support levels to watch are $58.43 (0.236 Fibonacci retracement) and $56.85 (lower Bollinger Band).
Oil prices edged lower during the session as market attention shifted to the rapid resumption of Russian crude oil supplies at the Novorossiysk hub. Loading operations at the port resumed faster than expected after attacks by Ukrainian drones and missiles.
Oil Price Forecast: Russian Supply Recovery Remains a Focus
Loading operations at the port of Novorossiysk resumed on Sunday after a two-day suspension, which temporarily reduced daily market supply by approximately 2.2 million barrels. This supply disruption pushed crude oil prices up more than 2% on Friday, but confirmation of the resumption of supply on Tuesday morning put downward pressure on prices. Traders continue to focus on whether US and Western sanctions will more significantly curb Russian exports in the coming months.
The U.S. Treasury Department has noted that sanctions imposed in October on Rosneft and Lukoil have begun to squeeze Moscow's revenues, while ANZ Research points out that the discount on Russian crude oil is widening. However, several analysts emphasize that Russia has historically demonstrated its ability to adapt to sanctions, meaning that unless sanctions are further tightened, supply disruptions will only be temporary.
China's reserves are accelerating.
Latest data shows that China's crude oil inventories increased significantly in October, with an estimated daily surplus of 690,000 barrels, due to imports and domestic production exceeding refinery processing capacity. This compares to a daily surplus of 570,000 barrels in September, highlighting China's strategy of increasing reserves when oil prices are considered favorable.
In October, China's crude oil imports totaled 11.39 million barrels per day, while production was 4.24 million barrels per day. The total amount of crude oil available for refineries to process was 15.63 million barrels per day, while refineries actually processed 14.94 million barrels per day. In the first ten months of this year, the average daily surplus was close to 900,000 barrels, further strengthening China's role as an informal stabilizer of the global supply and demand balance.
Oil Price Forecast: Goldman Sachs Warns of Multi-Year Supply Surge
Goldman Sachs reiterated that a significant supply glut will emerge in 2026 due to the completion of long-cycle projects and the gradual lifting of production cuts by OPEC+.
(WTI crude oil daily chart source: FX678)
The bank projects Brent crude to reach $56 per barrel and West Texas Intermediate (WTI) crude to reach $52 per barrel in 2026, significantly lower than current forward curve levels. Goldman Sachs notes that the daily supply surplus will widen to approximately 2 million barrels and persist into next year. The International Energy Agency (IEA) similarly predicts that the supply surplus could exceed 4 million barrels per day by 2025.
Goldman Sachs stated that Brent crude oil prices could fall to the $40 range if an economic recession occurs, but also emphasized that oil prices could exceed $70 per barrel in 2026-2027 if Russian production declines significantly.
Conclusion: Bearish outlook in the short term.
With Russian exports recovering, China absorbing excess supply at an uneven pace, and major institutions warning of a continued oversupply, the short-term outlook for crude oil is bearish. The current range-bound trading pattern, constrained by moving average resistance, reflects market preparation for further downward pressure unless new supply disruptions occur.
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