WTI Oil: Crude rallies above $60 on fresh US sanctions and US million-barrel purchase

Finding support at 6-month lows of around $56.40 per barrel, WTI has rallied just shy of 8.6% in the last three sessions alone.

Currently trading at $62.04, up 4.10% in yesterday’s session, recent performance marks the best three-day stint since late July.

As ever, let’s take a look at some of the macro themes at play, followed by some technical analysis as we attempt to answer the immortal question: what’s next for WTI?

• Gapping up 1.1% at Thursday’s open, WTI crude has found renewed buying support on new sanction announcements from the United States on leading Russian oil companies, including Rosneft and Lukoil
• Constrained previously by logistical problems of safe storage, and of course, funding issues, the US Department of Energy confirmed on Tuesday its intentions to purchase 1 million barrels of crude oil to replenish reserves, bolstering crude gains
• Otherwise, and in the bigger picture, a cloud of oversupply fears lingers over crude oil markets, especially considering record output from non-OPEC+ members

Most read: Gold (XAU/USD): Short-term bullish reversal triggered after 8% sell-off

It’s high time I returned to my commentary roots and wrote some more coverage on crude oil markets.

Although it would be fair to say that oil has played second fiddle to precious metals in recent months, both in terms of market interest and, indeed, performance.

With that said, this appears to be changing, with recent geopolitical developments offering some welcome upside and, crucially, boosting WTI pricing above $60 for the first time since earlier this month.

Without further ado, let’s break down some major macroeconomic themes and conclude with some market technicals, including some price targets.

New US sanctions on Russian oil: Reported Wednesday, the United States announced new sanctions on Russian oil exports, following an apparent breakdown in ceasefire negotiations between Russia and Ukraine.

Read the full press release here

Coming only one day after Trump shelved a planned meeting in Budapest with Putin, it would seem that frustrations are running high after the demands of an immediate ceasefire have fallen on deaf ears.

"I don’t want to have a wasted meeting. I don’t want to have a waste of time, so I’ll see what happens. We did all of these great deals, great peace deals, they’re all peace deals. Agreements, solid agreements every one of them"

President Donald Trump, speaking to reporters at the White House, 21/10/2025

Clearly, the sanctions are intended as a bargaining tool to help encourage a peace deal, but at least so far, words from the Kremlin suggest that the Russian domestic oil industry will remain largely unaffected, boasting of its level of immunity from Western sanctions.

While Trump hopes the economic impact of new sanctions will encourage Putin to return to the negotiating table, only time will tell how effective these measures will be.

As for oil pricing, the associated fallout raises questions about supply, which is a positive development for pricing. This holds even more true when considering that the market narrative has been almost exclusively one of oversupply - the most recent geopolitical developments question this assumption somewhat, especially if tensions escalate.

US to buy 1 million crude barrels to replenish reserves: I think most would agree that, especially when compared to previous presidents, Trump shares a very particular relationship with the crude oil markets. After all, who could forget this legendary catchphrase?

If put simply, however, Trump policy surrounding crude oil centers almost exclusively revolves around two core tenets:

1. To maintain America’s lead as #1 producer of crude oil worldwide, therefore establishing control over supply
2. To keep oil prices low to promote economic growth

On this basis, the latest development is the intent to purchase 1 million barrels of crude oil to replenish the Strategic Petroleum Reserve (SPR), which recently saw record levels of depletion under the administration of former President Joe Biden.

Being previously constrained by logistical matters and, of course, funding, the EIA will undoubtedly want to capitalise on historically low crude oil prices to increase its stockpile.

Naturally, markets have interpreted this information as positive for crude oil, helping to boost pricing.

Non-OPEC+ members report record crude output: While not as contemporaneous as the other two themes, a significant macro headwind continues to dictate the direction of crude markets: the fear of oversupply.

Most recently, this is reflected in record output from non-OPEC countries, which have contributed to the current bearish bias. Otherwise, the aforementioned EIA has also confirmed sustained high levels of production.

While there have been some attempts to stagger output increases by OPEC, which have proved limited in effectiveness, with crude oil inventories rising globally.

In a nutshell, although the previous two themes are bullish for crude oil, the longer-term bias likely remains bearish from a supply standpoint.

While recent upside has been impressive, rallying by almost 8.6%, there is still plenty of work to be done if oil is to break the current downtrend.

While on a macro level, the narrative surrounding supply would have to change significantly to support this, technically, here’s some level to watch to the upside:

• Price target #1 - Previous support turned resistance - $62.564
• Price target #2 - $63.564 - 61.8% Fib

What is encouraging, however, is that one of my personal favourite indicators, the SSL channel, has flipped to report a bullish bias. While this can occur during periods of market consolidation, when combined with a rising OBV volume, it may perhaps signify that a larger change is afoot.

With that said, price action remains overwhelmingly bearish, assuming crude cannot break above ~$63.564, which might shake things up somewhat.

Read more coverage from MarketPulse: Trump-Xi Meeting Leads to Improved Risk Appetite, Oil Continues to Rally – Market wrap for the North American session - October 23