WTI bears eye $79.00 amid four-day downtrend, US SPR talks in focus

WTI takes offers to refresh intraday low around $79.20, down 0.65% on the day during early Monday. In doing so, the black gold tests the lowest levels in one week during the four-day downtrend.

Behind the moves could be the fears of the US sale of fuel from the Strategic Petroleum Reserve (SPR) as well as sluggish market sentiment. In doing so, the commodity prices ignore geopolitical tension between Eurozone and Belarus.

During the weekend, US Senate Majority Leader Chuck Schumer urged President Joe Biden administration to approve fuel sales from the nation's SPR. The talks have been loud in the last few days and may recall the sellers if approved. Though, the OPEC+ refrain to entertain easy output should challenge the oil bears.

On the other hand, the European Union’s (EU) border with Belarus recently witnessed some geopolitical tension due to migrants. “Russian President Vladimir Putin said that Russia was ready to help resolve a migrant crisis on the border between Belarus and Poland, RIA news agency reported on Sunday citing an interview on a state TV channel,” per Reuters.

It’s worth noting that uncertainty over the US stimulus and doubts on the Fed’s next move add to the inflation fears to weigh on the WTI prices off late.

Amid these plays, US 10-year Treasury yields remain depressed around 1.558%, down 2.6 basis points (bps) whereas the S&P 500 Futures print 0.12% intraday gains at the latest.

Moving on, China Retail Sales and Industrial Production for October will join the risk catalysts and inflation fears to direct short-term WTI moves. Overall, the commodity prices may witness further weakness amid challenges to the demand-supply matrix.

Technical analysis

A six-week-old support line near $79.00 restricts short-term WTI moves, a break of which will challenge the monthly low near $77.60. Alternatively, the $80.00 threshold and 20-DMA near $81.70 restrict short-term recovery.