US Crude Oil Price Outlook: Technical Signals and Venezuela Supply Risks
With recent military activity in Venezuela linked to its oil reserves, many traders and investors are asking whether US crude oil prices could begin to rise.
Technical Analysis of US Crude Oil
From a technical perspective, oil prices have recently shown signs of potential reversal. The daily Relative Strength Index (RSI) dipped as low as 32, suggesting that US crude oil may be oversold and due for a corrective bounce.
At the same time, prices rebounded from the lower Bollinger Band and moved back through the 20-day exponential moving average (EMA), which is currently approaching the 50-day EMA. These technical signals often indicate improving momentum.
However, despite this recovery, prices are now sitting at a strong resistance level that has been tested seven times previously. This repeated rejection suggests ongoing market uncertainty, with traders likely waiting for a clear break of structure before committing to directional positions.
Venezuela News and Impact on Oil Prices
In recent developments, Donald Trump authorised US air strikes on Venezuela, alongside tighter sanctions and strong rhetoric surrounding the country’s oil industry. These actions have raised concerns over potential supply disruptions, which could support oil prices in the short term and provide a boost to US oil stocks.
That said, Venezuela’s oil production is already operating at historically low levels, meaning the immediate impact on global oil supply — and therefore prices — may be limited.
Looking further ahead, if the US were to allow American companies to invest in and rebuild Venezuela’s oil infrastructure, global supply could increase. Any meaningful rise in supply would likely place downward pressure on oil prices, potentially weighing on US crude oil and related energy stocks over the longer term.
Outlook for Traders and Investors
In the short term, recent US actions could lead to price volatility and upside opportunities for traders. However, many traders may prefer to wait for confirmation of a decisive break above resistance before entering bullish positions.
For longer-term investors, the outlook remains more cautious. If increased investment leads to higher oil production and supply, crude oil prices could fall over time, creating headwinds for US crude oil markets.
