At the start of the new week, the key question for traders was how oil would react to the weekend developments surrounding Venezuela, particularly the capture of President Maduro and his transfer to the United States. From a fundamental perspective, the initial logic was straightforward: if Venezuelan oil becomes more accessible to global markets, supply increases, which is typically bearish for oil prices. This expectation was reflected during the Asian session on Monday, where oil opened higher but later dropped as markets priced in this potential supply-side shift.
From a technical point of view, the situation is now extremely delicate. Price is currently sitting on an orange horizontal support, a level with a strong historical role. This area has acted as support, then resistance, and later support again, making it a technically significant decision zone. The market is clearly pausing here, waiting for confirmation from further participation once European and US traders fully engage.
The next directional move will be decisive. A daily close below the orange support would confirm that sellers are in control and would trigger a long-term signal to sell, opening the door for a deeper bearish continuation. On the other hand, a successful bounce from this support, followed by a break above the green dynamic resistance, would negate the bearish scenario and generate a signal to buy, suggesting that the market has absorbed the fundamental shock and is ready to move higher again. For now, oil remains at a crossroads, and patience is required until the market clearly chooses its direction.