During Asian trading hours on Wednesday (December 31), at the time of writing, WTI crude oil is trading near $57.8 per barrel, edging slightly lower. Although escalating geopolitical tensions in the Middle East and renewed uncertainty surrounding a Russia–Ukraine peace agreement have prompted the market to reassess expectations—reviving concerns over potential supply disruptions and providing some support—international oil prices remained largely stable after choppy trading on Tuesday.

According to reports, ongoing U.S. restrictions on Venezuelan oil exports, along with a suspension of Caspian Pipeline Consortium (CPC) Blend crude exports due to severe weather, have provided partial support to oil prices. In the Middle East, airstrikes carried out by a Saudi Arabia–led coalition on targets in southern Yemen have further amplified market concerns over regional supply security. In addition, U.S. President Donald Trump stated that the United States may support a new round of large-scale military action should Iran restart ballistic missile or nuclear weapons–related programs. This statement has also been viewed by the market as a source of potential geopolitical risk.

One analyst noted: “Against the backdrop of a growing oil oversupply, oil prices are facing downside pressure in the first quarter of 2026.” From a supply perspective, U.S. production continues to show resilience. Baker Hughes data indicates that the number of U.S. oil rigs rose by three last week to 412, marking a second consecutive weekly increase, though the count remains 70 rigs lower than a year ago.

The U.S. Energy Information Administration (EIA) forecasts that despite a decline in active rig counts, U.S. crude oil production could still reach 13.5 million barrels per day in 2026, only slightly below this year’s level of 13.6 million barrels per day. Meanwhile, the latest data from the American Petroleum Institute (API) shows crude inventories increased by 1.7 million barrels, down from the previous week’s 2.4 million-barrel build.

From a daily chart perspective, oil prices remain in a weak consolidation pattern. After a prior rebound, prices were capped near the $59 psychological level, failing multiple times to achieve an effective breakout—indicating strong overhead selling pressure. Currently, prices are trading below the 5-day and 10-day moving averages, with short-term moving averages turning downward and exerting technical pressure. The 20-day moving average, located near $60, continues to act as a key resistance level for rebounds.

In terms of momentum indicators, the RSI is hovering in the 45–50 range, failing to return to bullish territory, suggesting insufficient upside momentum while bears have yet to establish a clear directional trend. The MACD remains below the zero line; although the negative histogram bars are narrowing, a bullish crossover has not yet formed, indicating limited rebound sustainability.

The Bitop Market Analysis Team believes that geopolitical developments remain an important short-term catalyst for oil price volatility. However, from a medium-term perspective, expectations of global oversupply and persistently high U.S. production levels are steadily weakening the lasting impact of bullish news. In the absence of a material supply disruption, oil prices are more likely to remain range-bound, with limited upside potential and continued downside pressure.

Investors are advised to closely monitor developments in Middle East geopolitics, updates on the Russia–Ukraine peace negotiations, and weekly EIA crude inventory data. Overall, unless expectations of oversupply improve meaningfully, daily price action is more likely to fluctuate repeatedly within the $57–60 range. Key support lies near $57; a break below this level could open the door for a retest of previous lows.

For today’s crude trading strategy, a sell-on-rallies approach is preferred, supplemented by selective buy-on-dips opportunities. In the short term, watch for resistance at the $58.5–59.5 zone, on the upside and support at the $57.0–56.0 zone on the downside.

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