On Monday (November 25th), US crude oil fell slightly during the Asian trading session, trading around $71.15 per barrel. Last week, it rose more than 6% on the weekly line, swallowing up the previous weekly decline.

However, the bullish momentum is still insufficient. Even though the tense geopolitical situation has pushed pressure on the supply side, it is an undeniable fact that demand will decline in the medium term. Therefore, the probability of oil prices continuing to break through is not high. Geopolitical sentiment will eventually dissipate, and a price drop is a high probability event.

Fundamentally, we will continue to pay attention to the emotional changes in the geopolitical situation, while also monitoring whether inventory data confirms the supply side pressure sentiment. At the level of the US dollar index, we will focus on whether it continues to strengthen and exert pressure on oil prices in the medium term.

There was relatively little economic data on this trading day, and the technical trend continued to dominate on Friday. This week's focus is on EIA inventory data and Federal Reserve meeting minutes.

After Kiev used its missiles to strike deep targets in Russia, Moscow intensified its offensive against Ukraine

Russian President Putin stated last Friday that Russia will continue to test its new Oreshnik hypersonic missile system in actual combat,

And a reserve that can be used at any time has been established. He claimed that Ukraine's use of American ballistic missiles and British cruise missiles to strike Russia prompted Russia to take this action.

Representatives of Russian international organizations: France and the UK will pay the price for supporting Ukraine's attacks on targets within Russian territory.

On the 24th local time, TASS News Agency reported that Mikhail Ulyanov, the Permanent Representative of Russia to the Vienna International Organization, stated that France and the United Kingdom will pay a price for supporting Ukraine's attacks on targets within Russian territory.

According to multiple media reports, France and the UK have allowed Ukraine to use the "Scapa" and "Storm Shadow" cruise missiles to strike Russian territory.

Storm Shadow and Scape are the same missile, jointly developed by France and the UK and manufactured by the European Missile Group. This cruise missile can be launched from warships or fighter jets, with a range of 250 kilometers to 500 kilometers.

Ole Hansen, an analyst at Shengbao Bank, said: "The geopolitical tensions caused by the escalation of the Russia-Ukraine conflict have exceeded the level during the one-year conflict between Israel and Iranian backed militants."

According to CME's "Federal Reserve Watch", the probability of the Fed keeping current interest rates unchanged until December is 47.3%, and the probability of a cumulative 25 basis point rate cut is 52.7%.

The probability of maintaining the current interest rate unchanged by January 2025 is 37.2%, the probability of reducing interest rates by 25 basis points cumulatively is 51.6%, and the probability of reducing interest rates by 50 basis points cumulatively is 11.3%.

On a technical level, the weekly level of US crude oil has reversed the previous decline, forming a engulfment. According to the form, there is still momentum for bulls to rise, but the daily level has entered a dense pressure range, and only indicators have entered the bullish range.

The moving average has not formed a turning point upwards. If it falls below $70 in the short term, the bulls may give up halfway and return to the range oscillation, testing the support of the lower edge of the box. Overall, the geopolitical situation has only increased the volatility of oil prices and has not formed a bullish trend. We should be cautious during the day.

Daily chart of US crude oil