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Market Returns to Oversupply Pattern, How Low Will WTI Fall?
Commodity
Summary:
The latest OPEC report indicates a shift from supply scarcity to oversupply, re-establishing an excess supply market dynamic, which is likely to exert downward pressure on WTI prices in the short term.
Sell
CLOSEDWTI
End Time
58.650
Entry Price
55.200
TP
60.100
SL
59.906 +1.405 +2.40%
1450
Points
Loss
55.200
TP
60.101
CLOSING
58.650
Entry Price
60.100
SL
Fundamentals
According to the latest monthly report released by OPEC on November 12, the fundamental outlook of the global oil market has experienced a significant shift, becoming the primary driver behind today's WTI crude oil price movements. The most notable revision in the report pertains to the Q3 2025 global oil market assessment, which was sharply adjusted from a previous forecast of a supply deficit of 400,000 barrels per day to a surplus of 500,000 barrels per day. This near one million barrel per day reversal suggests the market may be transitioning from a tightening phase to a structurally oversupplied regime, exerting substantial downward pressure on oil prices. The primary reasons for this revision include higher-than-expected U.S. crude oil production and increased supply from OPEC member countries, resulting in a more ample global supply cushion.
This fundamental shift in outlook has rapidly transmitted to market prices. Following the report's publication, market sentiment was immediately undermined, and WTI futures plummeted by over 4%, briefly falling below US$59 per barrel. This sharp decline broke the nearly three-week consolidation pattern on technical charts, generating a clear downside breakout signal, which quickly shifted short-term market sentiment toward bearishness.
OPEC's report also highlights that, even with the planned suspension of output increases by the OPEC+ coalition in Q1 2026, a modest global supply surplus may still occur, further reinforcing expectations of medium-term market adequacy. Market participants are now closely monitoring the upcoming OPEC+ ministerial meeting on November 30, seeking indications of whether the organization will adopt new production policies to address the prevailing surplus situation.
Technical Analysis
In the 1D timeframe, the large bearish candlestick yesterday broke the nearly three-week sideways consolidation in crude oil prices, signifying a bearish breakout and a shift to a downtrend. The breach of the November 6 low at US$58.74 has opened the downward momentum toward US$56.00.
Currently, the primary support level below WTI is at US$56.00, with a more significant support at US$55.00. A breakdown below US$55.00 could further expand the downside potential. Conversely, if the price can stabilize within this support zone and form a clear bullish candlestick pattern, it could trigger a technical rebound, testing resistance range between US$60.00 and US$62.00.
Trading Recommendations
Trading Direction: Sell
Entry Price: 58.65
Target Price: 55.20
Stop Loss: 60.10
Valid Until: November 27, 2025 23:00:00
Support: 58.16, 56.00
Resistance: 58.97, 60.00
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