According to the XTI/USD chart, WTI crude is now trading above the key psychological level of $60, marking a sharp rebound of over 3% from October’s lows.

The surge came after U.S. President Donald Trump announced sanctions against major Russian oil producers Rosneft and Lukoil, which together account for more than 5 million barrels of oil per day.

The move is expected to reduce global oil supply; however, media outlets point out that:

→ there is no certainty that China and India will refrain from purchasing Russian crude;

→ previous sanctions introduced under the Biden administration — targeting companies such as Gazprom Neft and Surgutneftegaz — had little impact on Russian oil exports.

What could happen next?

Technical Analysis of the XTI/USD Chart

On 20 October, we noted that two descending channels had formed:

→ Red channel – a long-term pattern that developed following the Middle East escalation in June;

→ Purple channel – indicating accelerated downside pressure driven by rising OPEC+ output and hopes for a U.S.–China trade accord.

Our earlier assumption that the market was oversold and that the Falling Wedge pattern might trigger a bullish reversal proved correct (as shown by the arrow). Following the formation of an inverted head and shoulders pattern, oil prices climbed towards the median line of the purple channel.

At this stage, consolidation appears the most likely scenario, as supply and demand may stabilise around the channel’s median. Much will depend on statements from the White House, since higher oil prices could threaten U.S. inflation objectives.

However, if bullish momentum persists, WTI may continue to rise towards the next resistance area, defined by:

→ the upper boundary of the purple channel;

→ the 8–9 October highs, where a false breakout similar to the bear trap seen on 26 September cannot be ruled out.

Start trading commodity CFDs with tight spreads. Open your trading account now or learn more about trading commodity CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.