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WTI consolidates around $80.70-75 area, just above its lowest level since September

  • WTI seesaws between tepid gains/minor losses just above a two-month low touched on Friday.
  • Easing fears of supply disruptions from the Middle East and a modest USD strength cap the upside.
  • The risk of a further escalation in the Israel-Hamas conflict and tight global supply lend some support.

West Texas Intermediate (WTI) Crude Oil prices struggle to gain any meaning traction on the first day of a new week and oscillate in a narrow trading band around the $80.70-$80.75 region during the Asian session. The commodity, meanwhile, remains well within the striking distance of its lowest level since August 29 touched on Friday and continues to be weighed down by easing fears of a possible supply disruption from the Middle East.

Apart from this, a modest US Dollar (USD) recovery from a six-week low, supported by rebounding US Treasury bond yields, turns out to be another factor weighing on the USD-denominated commodity. That said, firming expectations that the Federal Reserve (Fed) is down raising interest rates should keep a lid on any meaningful upside for the US bond yields and cap the USD. Furthermore, top exporters Saudi Arabia and Russia said they would stick to extra voluntary oil output cuts until the end of the year, which, in turn, acts as a tailwind for WTI Crude Oil prices.

Israel, meanwhile, rejected calls for a ceasefire and its conflict with the Palestinian Islamist group, Hamas, so far, has shown no signs of de-escalation. Adding to this, Hezbollah leader Sayyed Hassan Nasrallah warned on Friday that a wider conflict in the Middle East was possible and that the fighting on the Lebanese front could turn into a full-fledged war. Moreover, reports suggested that Russia’s Wagner mercenary group planned to provide Hezbollah with air defence systems. This, along with China's economic woes, keeps traders on the edge and caps the upside for Oil prices.

Market participants also seem reluctant to place aggressive directional bets ahead of key macroeconomic data from China, starting with trade data on Tuesday, which should provide more cues on commodity demand in the world's top oil importer. China's inflation figures are also due for release later this week, on Thursday and offer more insight into spending patterns in the country. This, along with developments surrounding the Israel-Hamas conflict and the USD price dynamics, should contribute to producing some meaningful trading opportunities around Crude Oil prices.

Technical levels to watch

WTI US OIL

Overview
Today last price80.74
Today Daily Change0.08
Today Daily Change %0.10
Today daily open80.66
 
Trends
Daily SMA2084.34
Daily SMA5086
Daily SMA10081.29
Daily SMA20078
 
Levels
Previous Daily High83.34
Previous Daily Low79.94
Previous Weekly High84.85
Previous Weekly Low79.94
Previous Monthly High90.88
Previous Monthly Low80.52
Daily Fibonacci 38.2%81.24
Daily Fibonacci 61.8%82.05
Daily Pivot Point S179.29
Daily Pivot Point S277.92
Daily Pivot Point S375.89
Daily Pivot Point R182.69
Daily Pivot Point R284.72
Daily Pivot Point R386.09

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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