Oil Price Analysis: WTI Seeks Rebound After Breaking Below 200-Day Moving Average

Oil prices attempted a rebound today, breaking above the 200-day moving average for the first time since July 24. This is a significant milestone, occurring amid growing concerns about weakening demand and rising inventories. Additionally, expectations that interest rates may remain restrictive for some time ahead—especially as year-end approaches—have weighed on oil prices. Inventory Buildup and EIA Data Release Delay As previously noted, markets in 2023 did not fully reflect uncertainty surrounding China’s economic recovery, as the world’s second-largest economy purchased oil at record pace to replenish foreign exchange reserves. However, this uncertainty will persist until Chinese authorities appear satisfied with current reserve levels. Currently, however, the greater concern lies with U.S. economic slowdown. Recent indicators suggest the Federal Reserve’s cumulative tightening policy is beginning to take effect, as U.S. data show signs of strain. According to API data, U.S. crude oil inventories rose by 11.9 million barrels for the week ending November 3. If confirmed, this would mark the largest weekly inventory build since February. The U.S. Energy Information Administration (EIA) has delayed its weekly report this week due to adjustments required in market participants’ reporting protocols. Looking Ahead Attention now shifts to next week, when both OPEC and the International Energy Agency (IEA) are scheduled to release their latest global supply-and-demand assessments. Meanwhile, OPEC plans to hold a meeting at the end of this month to discuss its production policy entering 2024; the prospect of Venezuela restoring higher output levels may also be discussed.

What is the current trend in crude oil prices, and what is the fundamental analysis?

The core driver behind this reversal in oil price trends is a fundamental shift in the U.S.-Iran confrontation model. The U.S. strategic pivot toward Iran stems from the failure of military means to achieve intended objectives: after nearly six months of military standoff, the U.S. military not only faces severe ammunition shortages but has also failed to completely dismantle Iran’s nuclear program or achieve its stated goal of regime change. U.S. officials have explicitly stated that the current administration’s Iran policy temporarily avoids large-scale military action, instead intensifying economic pressure through naval blockades and sanctions. President Trump has likewise affirmed that there is no timetable for Iran’s return to negotiations—and that the U.S. is in no rush. These statements collectively confirm Washington’s abandonment of the military option, significantly reducing the risk of renewed open conflict. Domestic political and economic pressures in the United States have propelled this strategic shift. Persistently high oil prices have severely impacted American households and pushed overall inflation higher. Recent public opinion polls indicate U.S. public support for military action against Iran has fallen to its lowest level since the conflict began, while Trump’s approval rating remains at a historic low. With midterm elections approaching, high oil prices and inflation have become the ruling party’s most pressing electoral challenge. Consequently, abandoning high-risk armed conflict in favor of a lower-cost, more controllable economic campaign allows the U.S. government to maintain a tough external posture while avoiding further domestic economic damage from uncontrolled oil prices—making it the pragmatic choice. Avoiding War: A Shared Understanding Recent U.S.-Iran maneuvering suggests that turning to economic warfare reflects a rational, mutual decision to avoid direct military conflict. For the U.S., large-scale war would drive up global energy prices, disrupt domestic economic recovery, and intensify pressure on the Federal Reserve’s monetary policy—contradicting its current core interests. By implementing targeted economic sanctions, the U.S. can continuously suppress Iran’s energy exports and weaken its economic capacity, while avoiding the enormous financial costs and global market volatility associated with war.

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