Continuing its recovery momentum from late October, oil prices extended gains in early-week trading after the OPEC+ alliance unexpectedly paused its plan to increase production in Q1/2026. The move helped ease oversupply concerns and reinforced investor optimism.

OPEC+ pauses production hikes in early 2026

The Organization of the Petroleum Exporting Countries (OPEC) and its partners — collectively known as OPEC+ announced on Sunday that the group will add 137,000 barrels per day in December, matching the pace of the previous two months. However, from January through March 2026, due to seasonal factors and a forecasted softening in demand, eight member states will suspend additional output increases.

This decision signals a shift toward caution and supply stability, instead of pursuing volume growth at all costs a supportive factor for oil prices in the short to medium term.

Geopolitical tensions: Supply risks remain

Geopolitics continues to play a key role in oil price volatility, with mixed developments emerging:

• In Russia, a Ukrainian drone attack on Sunday hit the Tuapse oil port one of the country’s key export terminals on the Black Sea. The incident caused a fire and damaged a cargo vessel, raising concerns about potential supply disruptions from the world’s second-largest oil exporter.

• Conversely, in South America, President Donald Trump on Friday dismissed reports that the U.S. was considering military action against Venezuela, an OPEC member. This helped ease regional tensions and reduced fears of near-term supply interruptions from the country.

Overall, while the Russia-Ukraine conflict continues to threaten global energy supply chains, the U.S. backing off military options in Venezuela has partially stabilized market sentiment. Nonetheless, geopolitical risk remains elevated, continuing to support oil prices in the near term.

Weak Asian manufacturing — a challenge for demand

Fresh survey data shows manufacturing activity across major Asian industrial hubs remained weak in October. Sluggish U.S. demand and new tariff measures introduced by the Trump administration led to a decline in export orders across the region.

As the world’s largest oil-consuming region, a slowdown in industrial production could cap the pace of demand recovery in the short run.

Technical outlook: Oil is positioned for a new bullish cycle

Extending the price behavior highlighted in the October 23rd outlook:

WTI crude is currently in an upward leg from the red wave B toward red wave C, consisting of five smaller impulsive sub-waves.
The gold t1 wave completed at $62.37/barrel.
The corrective gold l1 wave appears to have finished around $59.47/barrel.
WTI is now entering a new bullish wave from gold l1 toward gold t2.

Invalidation levels:

• If WTI falls below $59.47/barrel, it would imply the gold l1 wave has not yet completed and the corrective phase may extend further.

• A break below $56/barrel would fully invalidate the bullish scenario, prompting a reassessment of the medium-term outlook.

Opportunity is opening — are you ready?

Fundamental and technical signals are currently supportive of a bullish trend in oil:

• OPEC+ has paused production increases, easing oversupply pressure.

• Geopolitical tensions continue to pose supply disruption risks.

• Wave-structure analysis signals the beginning of a new upward cycle.

If WTI holds above the $59.5/barrel zone, prices may continue advancing toward $68 – $70/barrel in the near term.

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