A glimmer of hope for peace between Russia and Ukraine emerges, while WTI crude oil approaches multi-year lows.
2025-11-26 01:54:36
Under the dual pressure of a breakthrough in the Russia-Ukraine peace agreement negotiations and weak US economic data, the bearish sentiment in the international crude oil market continues to intensify. WTI crude oil prices have continued their recent downward trend, approaching the key support level of $57, which has been established since March 2021, as of Tuesday evening. Market attention is focused on whether this short-term support level can be breached or broken, and the subsequent breakthrough or breach of this key price level will directly guide the medium-term trend of oil prices.
Substantial progress has been made in the Russia-Ukraine peace talks, but the risk of oversupply has intensified.
After weeks of intensive consultations and diplomatic maneuvering, the geopolitical landscape has reached a crucial turning point. On November 25th local time, officials from both the United States and Ukraine stated that Ukraine had agreed in principle to the core terms of the peace agreement proposed by the United States, with only "a few minor details" remaining to be finalized. The Ukrainian Minister of National Security explicitly stated on social media that the two delegations "have reached a consensus on the core terms of the agreement discussed at the Geneva meeting" and looked forward to arranging a visit by President Zelensky to the United States to complete the final steps. A subsequent joint statement from the White House indicated that the two sides had drafted an updated peace framework agreement. This series of developments has significantly increased market expectations for an end to the Russia-Ukraine conflict.
This news had a direct impact on the crude oil market. As a top global oil producer, Russia has been severely restricted in recent years by multiple rounds of sanctions imposed by the US, EU, and UK, significantly limiting its global market sales capacity. The Ukrainian drone attack on Russian refineries further hampered its oil production. Once a peace agreement is formally signed, Russian oil is expected to gradually return to the global market, which will significantly impact the already imbalanced supply and demand in the crude oil market. The International Energy Agency (IEA) has already warned that the global crude oil market will experience a record supply surplus in 2026, with supply expected to exceed demand by approximately 3.3 million barrels per day. The return of Russian oil will further amplify this oversupply. Affected by this, WTI crude oil prices plummeted on November 25th, with an intraday drop exceeding 2.57%, while Brent crude oil fell by 2.47%. WTI crude oil traded at $57.99 per barrel, very close to its key support level.
Weak US economic data weighs on oil demand expectations.
The weakness of the world's largest economy has become another key factor suppressing oil prices. Traders finally received the delayed US core economic data for September, which revealed signs of fragility in the economic fundamentals. Overall retail sales rose only 0.2% month-on-month, significantly lower than the market expectation of 0.4%. Although core retail sales, excluding volatile items, met expectations at 0.3%, it still reflected weak consumption. Regarding the Producer Price Index (PPI), while the monthly rate rose as expected by 0.3%, the core PPI was only 0.1%, slightly lower than market expectations, indicating insufficient inflationary pressure on the production side and weaker-than-expected economic activity.
Employment data further exacerbated market concerns. The weekly ADP employment report showed that in the four weeks ending November 8, U.S. private employers lost an average of 13,500 jobs per week. The weakness in the labor market directly impacts upstream demand for crude oil. In fact, the weakness in the U.S. economy has already spread; previous data showed that U.S. gasoline demand fell 3.5% year-on-year, the largest decline in two years. Slower activity in manufacturing and transportation further weakened actual demand for crude oil. Several institutions have lowered their global economic growth forecasts. The combination of weak demand and oversupply continues to suppress international oil prices.
Technical Analysis: Key Price Levels Become the Focus of the Battle Between Bulls and Bears
From a technical perspective, the WTI crude oil daily chart clearly shows a downward trend. The contract has been declining since last week, with a further drop of over 2.5% on Tuesday. The price is moving along the negative trend line and has stabilized below the 50-day EMA, consolidating the stability of the short-term downward trend. Bearish sentiment currently dominates. The most crucial point of contention is currently concentrated in the $57 area, which has formed significant support since March 2021 and serves as the last line of defense for the bulls in the short term. Historical trading data shows that $57.35 is the core support level of this range, having been tested multiple times previously. A decisive break below this level would confirm continued negative pressure.
Target price after downward breakout
If negative factors such as the formal signing of the Russia-Ukraine peace agreement materialize, causing a breach of the key support level of $57, the next important target for WTI crude oil will be the 61.8% Fibonacci retracement level of the 2020-2022 upward trend—the area below $54. Before that, $56.45 will serve as a short-term secondary support level, a price level that has historically provided temporary stabilization for oil prices on multiple occasions. However, considering the current oversupply fundamentals and clear downward trend, if this core support level is breached, further downward momentum could be released.
Resistance and upside potential of the rebound
If bulls can successfully hold the $57 support level, WTI crude oil may see a short-term technical rebound, with the first target around $60. However, the market generally believes that given the current established downtrend, the upside potential will be severely limited. $62 is a significant resistance level that has transformed from a previous key support level. Unless oil prices can break through this level with significant volume, any rebound will likely be seen as a more favorable opportunity to short. Analysts point out that the current bearish sentiment in the crude oil market continues to strengthen, and rebounds driven by geopolitical easing are unlikely to be sustainable, with the overall market still exhibiting a weak and volatile pattern.
Market Outlook and Key Focus
In the short term, the ongoing developments of the Russia-Ukraine peace agreement will be a key variable in the crude oil market, with the timing of the finalization and signing of the agreement potentially triggering significant price fluctuations. Meanwhile, the ongoing impact of the US government shutdown, the release of further economic data, and changes in the labor market will continue to influence demand expectations. On the supply side, adjustments to OPEC+'s production cut policy, changes in production from non-OPEC oil-producing countries, and the specific pace of Russia's return to the market are all key factors to monitor.
From a technical perspective, the strength of support around $57, the effectiveness of medium- to long-term support below $54, and the success of breaking through resistance levels at $60 and $62 will determine the short-term direction of oil prices. Traders need to closely monitor volume changes at these key price levels to determine the continuation of the trend. For medium- to long-term investors, the IEA's forecast of a supply glut in 2026, the progress of the global energy transition, and the recovery in demand in major economies will be important factors influencing investment decisions.
Substantial progress has been made in the Russia-Ukraine peace talks, but the risk of oversupply has intensified.
After weeks of intensive consultations and diplomatic maneuvering, the geopolitical landscape has reached a crucial turning point. On November 25th local time, officials from both the United States and Ukraine stated that Ukraine had agreed in principle to the core terms of the peace agreement proposed by the United States, with only "a few minor details" remaining to be finalized. The Ukrainian Minister of National Security explicitly stated on social media that the two delegations "have reached a consensus on the core terms of the agreement discussed at the Geneva meeting" and looked forward to arranging a visit by President Zelensky to the United States to complete the final steps. A subsequent joint statement from the White House indicated that the two sides had drafted an updated peace framework agreement. This series of developments has significantly increased market expectations for an end to the Russia-Ukraine conflict.
This news had a direct impact on the crude oil market. As a top global oil producer, Russia has been severely restricted in recent years by multiple rounds of sanctions imposed by the US, EU, and UK, significantly limiting its global market sales capacity. The Ukrainian drone attack on Russian refineries further hampered its oil production. Once a peace agreement is formally signed, Russian oil is expected to gradually return to the global market, which will significantly impact the already imbalanced supply and demand in the crude oil market. The International Energy Agency (IEA) has already warned that the global crude oil market will experience a record supply surplus in 2026, with supply expected to exceed demand by approximately 3.3 million barrels per day. The return of Russian oil will further amplify this oversupply. Affected by this, WTI crude oil prices plummeted on November 25th, with an intraday drop exceeding 2.57%, while Brent crude oil fell by 2.47%. WTI crude oil traded at $57.99 per barrel, very close to its key support level.
Weak US economic data weighs on oil demand expectations.
The weakness of the world's largest economy has become another key factor suppressing oil prices. Traders finally received the delayed US core economic data for September, which revealed signs of fragility in the economic fundamentals. Overall retail sales rose only 0.2% month-on-month, significantly lower than the market expectation of 0.4%. Although core retail sales, excluding volatile items, met expectations at 0.3%, it still reflected weak consumption. Regarding the Producer Price Index (PPI), while the monthly rate rose as expected by 0.3%, the core PPI was only 0.1%, slightly lower than market expectations, indicating insufficient inflationary pressure on the production side and weaker-than-expected economic activity.
Employment data further exacerbated market concerns. The weekly ADP employment report showed that in the four weeks ending November 8, U.S. private employers lost an average of 13,500 jobs per week. The weakness in the labor market directly impacts upstream demand for crude oil. In fact, the weakness in the U.S. economy has already spread; previous data showed that U.S. gasoline demand fell 3.5% year-on-year, the largest decline in two years. Slower activity in manufacturing and transportation further weakened actual demand for crude oil. Several institutions have lowered their global economic growth forecasts. The combination of weak demand and oversupply continues to suppress international oil prices.
Technical Analysis: Key Price Levels Become the Focus of the Battle Between Bulls and Bears
From a technical perspective, the WTI crude oil daily chart clearly shows a downward trend. The contract has been declining since last week, with a further drop of over 2.5% on Tuesday. The price is moving along the negative trend line and has stabilized below the 50-day EMA, consolidating the stability of the short-term downward trend. Bearish sentiment currently dominates. The most crucial point of contention is currently concentrated in the $57 area, which has formed significant support since March 2021 and serves as the last line of defense for the bulls in the short term. Historical trading data shows that $57.35 is the core support level of this range, having been tested multiple times previously. A decisive break below this level would confirm continued negative pressure.
Target price after downward breakout
If negative factors such as the formal signing of the Russia-Ukraine peace agreement materialize, causing a breach of the key support level of $57, the next important target for WTI crude oil will be the 61.8% Fibonacci retracement level of the 2020-2022 upward trend—the area below $54. Before that, $56.45 will serve as a short-term secondary support level, a price level that has historically provided temporary stabilization for oil prices on multiple occasions. However, considering the current oversupply fundamentals and clear downward trend, if this core support level is breached, further downward momentum could be released.
Resistance and upside potential of the rebound
If bulls can successfully hold the $57 support level, WTI crude oil may see a short-term technical rebound, with the first target around $60. However, the market generally believes that given the current established downtrend, the upside potential will be severely limited. $62 is a significant resistance level that has transformed from a previous key support level. Unless oil prices can break through this level with significant volume, any rebound will likely be seen as a more favorable opportunity to short. Analysts point out that the current bearish sentiment in the crude oil market continues to strengthen, and rebounds driven by geopolitical easing are unlikely to be sustainable, with the overall market still exhibiting a weak and volatile pattern.
Market Outlook and Key Focus
In the short term, the ongoing developments of the Russia-Ukraine peace agreement will be a key variable in the crude oil market, with the timing of the finalization and signing of the agreement potentially triggering significant price fluctuations. Meanwhile, the ongoing impact of the US government shutdown, the release of further economic data, and changes in the labor market will continue to influence demand expectations. On the supply side, adjustments to OPEC+'s production cut policy, changes in production from non-OPEC oil-producing countries, and the specific pace of Russia's return to the market are all key factors to monitor.
From a technical perspective, the strength of support around $57, the effectiveness of medium- to long-term support below $54, and the success of breaking through resistance levels at $60 and $62 will determine the short-term direction of oil prices. Traders need to closely monitor volume changes at these key price levels to determine the continuation of the trend. For medium- to long-term investors, the IEA's forecast of a supply glut in 2026, the progress of the global energy transition, and the recovery in demand in major economies will be important factors influencing investment decisions.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
