Crude Oil (CLUSD): Fundamental + Technical Analysis - 17 December 2025
Table of Contents
- Market Recap: Scenario Playing Out
- Fundamental Drivers Pressuring Oil
- Venezuela Sanctions: A New Variable
- Multi-Timeframe Market Structure
- What Traders Should Focus on Next
Market Recap: The Planned Scenario Delivered
Following our last swing analysis, US oil declined exactly as projected, driven by persistent supply-side pressure and weakening demand expectations.
Sellers successfully pushed price into the previous swing low and target zone, where profit-taking emerged near the mid-$55 area.
This reaction was technically expected.
However, just as price reached that key downside objective, a new fundamental catalyst entered the market, preventing further immediate downside continuation.
Fundamental Pressure Still Favors the Bears
From a macro perspective, oil fundamentals remain structurally bearish:
- Global supply remains elevated
- OPEC has begun unwinding cuts faster than anticipated
- Demand-side growth remains fragile amid broader economic uncertainty
These factors continue to cap upside attempts and explain why the broader trend has not shifted, despite recent stabilization.
Venezuela Sanctions Change the Short-Term Equation
The latest US decision to impose full-scale sanctions on Venezuela, effectively blocking oil exports, has introduced short-term support.
Venezuela, as an OPEC member with significant reserves, represents a non-negligible supply risk.
If geopolitical tensions escalate further, particularly in the event of military conflict, oil prices could see additional upside extensions, as history consistently shows that instability in oil-producing regions supports crude prices through supply-risk premiums.
Market Structure Across Timeframes
Despite the bounce, higher-timeframe structure remains bearish.
The current recovery still fits within a corrective move, largely driven by seller profit-taking rather than fresh long-term demand.
- Higher Timeframe (HTF): Bearish structure remains intact. A move higher toward the 57–58 zone, or even higher, can still occur without invalidating the bearish trend.
- Intraday Structure: Momentum has turned bullish, supported by geopolitical headlines.
Intraday upside targets align near previous supply zones around the upper $56s, with potential extensions into the $57.5 area.
What Matters Most From Here
Given the current backdrop, patience is critical.
Geopolitical developments surrounding Venezuela will dictate near-term volatility, while the underlying structure argues against aggressive positioning.
- If the bearish structure holds, a retest and potential break of previous lows remains possible
- If geopolitical risks intensify, short-term buyers may stay active, extending the corrective move
- Staying sidelined until clarity improves may offer the best risk-adjusted outcome
It is also important to recognize that oil prices cannot sustainably collapse, as excessively low prices begin to threaten producer economics, a natural stabilizing force in the market.
Final Takeaway
US oil remains structurally bearish, but Venezuela-related geopolitical risks are creating short-term bullish pressure and choppy conditions.
Until either the macro structure breaks or geopolitical risk escalates meaningfully, reactive trading and patience outperform prediction.