Crude oil trading alert: Geopolitical tensions and a rebounding US dollar put pressure on oil prices, causing them to return to range-bound trading.
2026-01-20 09:30:24
During Tuesday's Asian trading session, West Texas Intermediate (WTI) crude oil prices fluctuated around the $59 mark, failing to continue the mild rebound from the mid-$58 level of the previous day.
The market lacked a clear direction, with bullish and bearish forces offsetting each other, resulting in a significant narrowing of the trading range. The US stance on Iran was somewhat more subdued than before, which the market interpreted as a decrease in the risk of intervention.
The reduced uncertainty on the supply side led to a decline in the risk premium for crude oil, becoming an important factor in stabilizing oil prices. However, this positive effect was more of a "flooring" measure than a core driver of a sustained upward trend.
Market strategist Daniel Harper said, "As long as the situation in the Middle East does not deteriorate sharply, the geopolitical premium for crude oil will continue to be squeezed out, and investors will refocus on demand and macroeconomic policies."
Meanwhile, trade concerns between the US and Europe have clearly intensified. The US plan to impose tariffs on goods from some European countries has triggered a strong backlash from the EU, which is preparing retaliatory measures. Market concerns that trade friction could weaken economic activity and energy consumption expectations are putting real pressure on crude oil bulls.
Energy consultant Laura Mendes points out: "The tariff conflict not only brings emotional shocks, but may also suppress demand for transportation and industrial fuels, which is an important reason why oil prices are currently struggling to break through."
On the financial front, expectations for a Federal Reserve rate cut have continued to cool, keeping the US dollar at a high level. A stronger dollar typically increases the cost of dollar-denominated commodities, weakens non-US dollar buying interest, and becomes a significant macroeconomic variable suppressing crude oil prices.
The flow of safe-haven funds into dollar assets has also put pressure on the overall commodity market. Going forward, investors will focus on the final reading of US Q3 GDP and the Personal Consumption Expenditures (PCE) price index. These data will influence market expectations regarding the Federal Reserve's policy path and further impact the correlation between the dollar and crude oil prices.
Furthermore, the diplomatic maneuvering surrounding Greenland and any new developments in the Middle East situation could trigger price fluctuations in the short term.
From a daily chart perspective, WTI is still in a recovery phase after a recent decline. Prices have repeatedly found support around $58, but the rebound has consistently been limited to the $60-$60.50 range, indicating significant selling pressure above.
The moving average system is showing a convergent and bearish trend, with the 5-day and 10-day moving averages trending flat and not yet forming a clear bullish alignment, indicating insufficient trend momentum. In terms of technical indicators, the MACD is converging below the zero line, with the green bars gradually shortening, suggesting that the downward momentum has weakened, but a golden cross signal has not yet appeared.
The RSI is hovering around 45, in a neutral to slightly bearish range, reflecting a cautious market sentiment. If the price can effectively hold above $60, it may test the $61.50 resistance level.
Conversely, if the price falls below $58 again, it may retest the $56.80 support level. Overall, the daily chart still indicates a bottoming-out structure, and without significant geopolitical or demand-driven positive factors, the price is more likely to consolidate within a range.
Editor's Note:
The crude oil market is currently caught in a tug-of-war between multiple factors: on the one hand, the easing of the US stance on Iran has reduced supply concerns; on the other hand, trade anxieties between Europe and the US, coupled with a strong dollar, continue to suppress risk assets.
Demand expectations are the core variable determining future direction; if macroeconomic data is weak, oil prices may continue to face downward pressure. In the short term, WTI is likely to remain within the $58-$60 range, and close attention should be paid to marginal changes in US economic data and geopolitical situations.
The market lacked a clear direction, with bullish and bearish forces offsetting each other, resulting in a significant narrowing of the trading range. The US stance on Iran was somewhat more subdued than before, which the market interpreted as a decrease in the risk of intervention.
The reduced uncertainty on the supply side led to a decline in the risk premium for crude oil, becoming an important factor in stabilizing oil prices. However, this positive effect was more of a "flooring" measure than a core driver of a sustained upward trend.
Market strategist Daniel Harper said, "As long as the situation in the Middle East does not deteriorate sharply, the geopolitical premium for crude oil will continue to be squeezed out, and investors will refocus on demand and macroeconomic policies."Meanwhile, trade concerns between the US and Europe have clearly intensified. The US plan to impose tariffs on goods from some European countries has triggered a strong backlash from the EU, which is preparing retaliatory measures. Market concerns that trade friction could weaken economic activity and energy consumption expectations are putting real pressure on crude oil bulls.
Energy consultant Laura Mendes points out: "The tariff conflict not only brings emotional shocks, but may also suppress demand for transportation and industrial fuels, which is an important reason why oil prices are currently struggling to break through."
On the financial front, expectations for a Federal Reserve rate cut have continued to cool, keeping the US dollar at a high level. A stronger dollar typically increases the cost of dollar-denominated commodities, weakens non-US dollar buying interest, and becomes a significant macroeconomic variable suppressing crude oil prices.
The flow of safe-haven funds into dollar assets has also put pressure on the overall commodity market. Going forward, investors will focus on the final reading of US Q3 GDP and the Personal Consumption Expenditures (PCE) price index. These data will influence market expectations regarding the Federal Reserve's policy path and further impact the correlation between the dollar and crude oil prices.
Furthermore, the diplomatic maneuvering surrounding Greenland and any new developments in the Middle East situation could trigger price fluctuations in the short term.
From a daily chart perspective, WTI is still in a recovery phase after a recent decline. Prices have repeatedly found support around $58, but the rebound has consistently been limited to the $60-$60.50 range, indicating significant selling pressure above.
The moving average system is showing a convergent and bearish trend, with the 5-day and 10-day moving averages trending flat and not yet forming a clear bullish alignment, indicating insufficient trend momentum. In terms of technical indicators, the MACD is converging below the zero line, with the green bars gradually shortening, suggesting that the downward momentum has weakened, but a golden cross signal has not yet appeared.
The RSI is hovering around 45, in a neutral to slightly bearish range, reflecting a cautious market sentiment. If the price can effectively hold above $60, it may test the $61.50 resistance level.
Conversely, if the price falls below $58 again, it may retest the $56.80 support level. Overall, the daily chart still indicates a bottoming-out structure, and without significant geopolitical or demand-driven positive factors, the price is more likely to consolidate within a range.
Editor's Note:
The crude oil market is currently caught in a tug-of-war between multiple factors: on the one hand, the easing of the US stance on Iran has reduced supply concerns; on the other hand, trade anxieties between Europe and the US, coupled with a strong dollar, continue to suppress risk assets.
Demand expectations are the core variable determining future direction; if macroeconomic data is weak, oil prices may continue to face downward pressure. In the short term, WTI is likely to remain within the $58-$60 range, and close attention should be paid to marginal changes in US economic data and geopolitical situations.
- 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.
