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- WTI encountered some selling pressure early in the week, although downward momentum appears limited.
- Concerns surrounding international commerce and OPEC+ strategies to boost output are weighing on prices.
- Elevated geopolitical tensions are still a factor and should provide a floor for Oil values.
West Texas Intermediate (WTI) US Crude Oil is finding it difficult to build on the moderate upward movement seen in the previous two sessions, attracting some selling interest near the $63.55 level during Monday’s Asian trading. The commodity is currently changing hands around $62.65, a decline of 0.50% on the day, but lacks strong downward momentum and continues to fluctuate within a well-established range.
Comments made on Sunday by US Treasury Secretary Scott Bessent, indicating uncertainty about whether US President Donald Trump had communicated with Chinese President Xi Jinping, are tempering recent optimism regarding reduced trade friction between the world’s leading economies. This development contributes to concerns about a potential global economic slowdown, which could negatively impact fuel consumption. Furthermore, OPEC+’s plans to ramp up production are adding to the downward pressure on Crude Oil prices.
Nevertheless, the risk premium associated with geopolitical instability persists due to the ongoing conflict between Russia and Ukraine. Indeed, North Korea announced on Monday that it had deployed forces to support Russia in the Ukrainian conflict. Additionally, US Secretary of State Marco Rubio suggested that the US might discontinue its mediation efforts if Russia and Ukraine fail to achieve progress. This is preventing market participants from initiating significant short positions in Crude Oil.
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