WTI Outlook: Oil Bounces From Channel Lows — Major Reversal in 2026?

Ben Graham · 3 horas atrás

Oil has been falling continuously since the beginning of December, maintaining the broad downward trend that has characterized 2025—excluding, of course, the price spikes seen during the June 12-Day War.

The typical fundamental reasoning for this relentless slide has been significantly higher supply from OPEC+, a result of coordinated geopolitical planning aimed at undercutting Russia's profits from its oil-sponsored war in Ukraine.

Furthermore, Russia itself has flooded its purchasers with supply; despite sanctions raising barriers and counterparty risks for European markets, the competitive pricing of Slavic oil has kept global prices depressed.

OilDemandChart750px — Oil Demand Projections – Inside Climate News (Data from IEA)

However, broader themes may now be getting priced in.

President Trump's DJT recently announced a partnership with a nuclear-fusion research firm, sparking conversations about the future of energy.

Even as the world requires immense power to fuel an expanding network of AI servers and data centers, technological breakthroughs and energy efficiency gains could contribute to a diminishing secular demand for Black Gold.

After all, technological pivots aimed at reducing oil dependence have been a recurring theme since the 1970s.

But as pointed out in our recent Oil Analysis, the current downtrend could be approaching a stall. This pause might evolve into a more significant long-term bottom as market participants conclude their 2025 trades.

A combination of holding the 2021 lows, potentially easing tensions between Russia and Ukraine (implying less supply), and US producers scaling back output could set the stage for a rebounding, more rangebound price action in 2026.

In the meantime, let's determine what price ranges could be in play for both the short and long run as we dive into our Oil Technical Analysis.

WTI (US) Oil Technical Analysis

Daily Chart

Screenshot 2025-12-19 at 8.54.20 AM — US Oil (WTI) Daily Chart, December 19, 2025 – Source: TradingView

Since reaching new yearly lows just three sessions ago, traders have started to reverse their selling positions leading to a 2.40% rebound from $55.00.

The rebound has come after a few technical warnings: The selloff had shown some (minor) bullish daily divergence across higher timeframe RSI, but most importantly, reached the lows of its major Descending Channel.

Despite the rebound, there will be a few things to monitor for upcoming action:

Whether bulls manage to break above the $57.00 highs (extremes of the $2 2025 Support Zone)
If they do, the action should at least test the 50-Day Moving Average, a major price magnet
A lower break would see its next support closer to $53-$54 but doesn't look too likely.

Marking trend lows here should point to a $55 to $70 Range for 2026, barring major geopolitical disruption.

4H Chart and Technical Levels

Screenshot 2025-12-19 at 9.37.33 AM — US Oil (WTI) 4H Chart, December 19, 2025 – Source: TradingView

As indicated in our previous Oil Outlook, the completed Measured Move led to quite a strong reversal.

Having broken the downtrend, short-term upside is warranted. Keep an eye on the Major Pivot for a confirmed breakout (particularly above the 4H 50-MA at 57.12)

Levels to place on your WTI charts:

Resistance Levels

$57.00 to $58.00 Major Pivot (and 4H 50-MA)
$59 to $60 2021 Resistance and Channel Highs
Minor Resistance $62 to $63
Key September Resistance $65 to $66

Support Levels

$55 to $56.50 2025 Support and Channel lows (testing)
Yearly lows $55.00
2019 mini support $53 to $54
Mid-2019 Main support $51 to $52.50

1H Chart

Screenshot 2025-12-19 at 9.44.06 AM — US Oil (WTI) 1H Chart, December 19, 2025 – Source: TradingView

Having breach back above its 50-Hour MA, the short-term action is more bullish than bearish – Keep an eye on the 1H Bull Channel.

Soon to be overbought RSI conditions points to either a small reversal or consolidation.

WTI is not overbought just yet, so short-term continuation could still pursue.

Safe Trades!

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