By: Economy Middle east

Oil prices saw a slight increase on Tuesday amidst ongoing geopolitical tensions and strategic production choices made by OPEC+. The market displayed cautious optimism, weighing the risks associated with military actions in Eastern Europe and escalating international tensions against concerns of a possible oversupply.

Market data indicates a modest rise in crude oil prices, with Brent crude trading at approximately $63.21 per barrel, up 0.05 percent or 3 cents. Meanwhile, West Texas Intermediate (WTI) crude rose by 0.15 percent or 9 cents, reaching $59.41.

Geopolitical risks continue to significantly impact oil markets as the Russia-Ukraine conflict intensifies, causing unease among energy traders. Ukrainian military strikes on Russian energy infrastructure have disrupted key facilities, notably the major port of Novorossiysk, raising concerns over supply stability. Additionally, escalating tensions between the United States and Venezuela further complicate the supply outlook, providing some upward pressure on prices amid broader market worries.

OPEC+’s cautious production strategy

On the supply front, OPEC+ has reiterated its plan for a modest increase in oil production for December but has decided to pause any further increases in the first quarter of 2026. This cautious approach aims to maintain market stability while avoiding an oversaturation of supply amidst weakening demand signals. Analysts suggest this strategic restraint is intended to prevent a supply glut that could lower prices in the near future.

Despite these geopolitical challenges, market fundamentals indicate potential downward pressure on prices in the medium term. Reports from analysts, including Ritterbusch and Associates, highlight a deterioration in global supply and demand dynamics, predicting crude prices could fall to around $55 per barrel for WTI and $59 for Brent. While short-term spikes may occur due to geopolitical events, the longer-term trend suggests prices may ease if global inventories remain high and demand weakens.

Technical analysis of Brent crude shows prices currently near $63.69 per barrel, testing a critical resistance level of around $64.05. Indicators suggest a possibility of a short-term bullish correction; however, this could be followed by a decline below the $59.65 support level unless a strong rally drives prices above $65.45. A rally of that magnitude could indicate a significant breakout potential, but current signals lean toward a cautious and volatile market environment.

Over the past month, crude prices have dropped approximately 2.7 percent, influenced by geopolitical uncertainty and concerns about oversupply amid fluctuating global demand patterns. This reflects a market balancing short-term shocks with medium-term supply and demand fundamentals.