Market Insights > Daily Market Analysis New

27 October 2025,03:49

Daily Market Analysis New

Oil Prices Post Largest Weekly Gain in Months on Geopolitical Supply Shock and Trade Truce

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27 October 2025, 03:49

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Key Takeaways:

*WTI crude rallied from below $56 to near $62, marking its strongest weekly advance in months and signaling a bullish trend reversal.

*Coordinated Western sanctions on Russia’s top oil producers could remove up to 2 million barrels per day from global supply, tightening market conditions.

*A tentative U.S.–China trade framework reached in Kuala Lumpur eased tariff threats and lifted global growth sentiment, reinforcing oil’s upside momentum.

Market Summary:

Oil markets registered their most significant weekly advance in months, with prices rallying over 7% to signal a potent bullish trend reversal. The surge propelled West Texas Intermediate crude from recent lows below $56 to hover near weekly highs around the $62 mark, a move catalyzed by a confluence of geopolitical and trade developments.

The primary driver was a substantial supply-side shock initiated by a new round of coordinated Western sanctions. The U.S. Treasury Department imposed fresh restrictions on Russia’s two largest oil producers, Rosneft and Lukoil, as part of a broader push to force peace negotiations. This action was echoed by key allies in the European Union and the United Kingdom, with the collective measures potentially removing up to 1-2 million barrels per day from the global supply, creating an immediate tightness in the market.

Adding a robust demand-side tailwind, trade tensions between the world’s two largest economies showed signs of a meaningful thaw. Negotiators from the U.S. and China met in Kuala Lumpur and acknowledged reaching a tentative “framework agreement,” averting the threatened 100% tariffs and retaliatory export controls on rare earth minerals. This constructive progress raises the likelihood of a high-level meeting at the upcoming APEC summit in Korea, significantly improving the global economic outlook and, by extension, the demand forecast for energy. The combination of a tangible supply constraint and a brighter demand picture creates a compelling environment for oil, suggesting strong upside momentum could persist in the near term.

Technical Analysis

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Crude Oil, H4:

Oil prices have confirmed a promising bullish shift, decisively breaking above the downtrend channel that has constrained the market for weeks. This structural break indicates a significant change in momentum, with prices now establishing a foothold near the key resistance level of $62.00. A sustained hold at or above this threshold would serve as a strong bullish signal, potentially validating the breakout and opening a path toward higher price targets.

However, the technical picture presents a note of near-term caution. The Relative Strength Index (RSI) has entered overbought territory, signaling that the rally may be extended. Concurrently, the Moving Average Convergence Divergence (MACD), while trading above its zero line, is showing early signs of a potential bearish crossover. This divergence suggests upward momentum may be peaking in the very short term.

Consequently, while the broader bias is bullish following the channel breakout, traders are advised to be tactical. The market is susceptible to a technical retracement to consolidate its recent sharp gains. The overall bullish structure would remain intact so long as prices hold above the former channel resistance, which should now act as a new support level.

Resistance Levels: 63.30, 65.00

Support Levels: 60.15, 58.30

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