- WTI attracts some buyers and snaps a three-day losing streak to a multi-week trough.
- Rising Middle East tensions turn out to be a key factor underpinning the commodity.
- Concerns about slowing demand in China and the global supply glut could cap gains.
West Texas Intermediate (WTI) US Crude Oil prices show some resilience below the $67.00 round-figure mark and attract some buyers at the start of a new week. The commodity currently trades just below mid-$67.00s, up 0.60% for the day, and for now, seems to have snapped a three-day losing streak to a three-week low touched on Friday.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, last week decided to postpone planned supply increases by three months until April and extend the full unwinding of cuts by a year until the end of 2026. Moreover, the worsening Russia-Ukraine war, along with the overthrow of Syrian President Bashar al-Assad by rebels, keeps the geopolitical risk premium in play and acts as a tailwind for Crude Oil prices.
Furthermore, signs of US economic resilience, along with hopes that US President-elect Donald Trump’s expansionary policies will boost fuel demand, offer some support to the black liquid. Meanwhile, Saudi’s price cuts to Asian buyers highlighted concerns about a slowdown in demand from China – the world’s top oil importer. Adding to this, worries about a potential supply glut might cap any meaningful upside for Crude Oil prices.
Furthermore, a closely followed report by Baker Hughes on Friday showed that the number of oil and gas rigs deployed in the US hit the highest since mid-September last week. This pointed to rising output from the world’s biggest crude producer and might further contribute to keeping a lid on Crude Oil prices. Hence, it will be prudent to wait for strong follow-through buying before positioning for any further appreciating move for the commodity.
