WTI snaps two-day rebound near $76.50 despite geopolitical woes, US Dollar retreat
- WTI prints mild losses to probe the previous rebound from three-week low.
- Russia’s halt of Oil supplies to Poland joins more Western sanctions on Moscow to highlight geopolitical woes.
- US SPR woes challenge energy buyers amid hawkish central bank concerns.
WTI crude oil fades the previous weekly rebound as it retreats to $76.50 while printing mild losses during early Monday. In doing so, the black gold struggles to justify geopolitical fears emanating from Russia, as well as fail to cheer a pullback in the US Dollar, amid hawkish central bank concerns.
That said, Politico reports fresh sanctions on Russia from the US and the UK, as well as the European Union (EU states) after a clash between Poland and Italy held up the process for days. On the other hand, Reuters came out with the news suggesting Russia’s halting of oil flow to Poland via the Druzhba pipeline.
It should be noted that the recently firmer statistics from the developed economies allowed their respective central banks to defend the hawkish bias and suggest more rate hikes, even as recession fears loom. The same challenges the energy prices amid fears of low demand in the future.
Also weighing on the energy prices could the US President Joe Biden’s readiness to ease control of the Strategic Petroleum Reserves (SPR) to tame the oil shortage.
Additionally, the US Dollar’s strength exerts downside pressure on the energy benchmark, despite the latest pullback from the seven-week high.
Moving on, the weekly Oil inventory numbers from the American Petroleum Institute (API) and the Energy Information Administration (EIA) could entertain Oil traders but major attention will be given to the risk catalysts for clear directions. That said, the chatter surrounding the hidden alliance between Russia and China could keep Oil buyers hopeful.
Technical analysis
A daily closing beyond a two-week-old descending resistance line, around $27.30 by the press time, becomes necessary for the WTI crude oil buyers to keep the reins.