WTI sellers attack $105.00 on mixed clues over Russia-Ukraine crisis, Iran deal

• WTI remains on the back foot after stepping back from 14-year during the last week.
• Positive updates concerning Moscow-Kyiv talks battle fears that Russian demand from Iran could collapse Tehran’s deal with the West.
• Hopes of China’s further easing, US-China meeting also underpin the market’s recent upbeat mood.
• Risk catalysts are the key amid a light calendar on Monday.

Having reversed from the fresh 14-year high, WTI crude oil prices stay pressured at around $105.00 during the initial Asian session on Monday.

In doing so, the black gold reacts to the market’s increased optimism over the Russia-Ukraine peace talks, as well as hopes that the US and China may overcome their differences. However, fears that Iran’s denuclearization deal may fail, due to the Russian pressure on Tehran, joins mixed updates from Moscow and fears of further shelling on Kyiv to keep oil buyers hopeful.

Weekend news confirmed upbeat developments on the Moscow-Kyiv talks following the positive updates from negotiations between Russia and Ukraine by Russian President Vladimir Putin on Friday. Also positive were updates from Bloomberg saying, “Diplomats from the US and China will meet for the first time in person since the Ukraine-Russia crisis began on Monday.”

Alternatively, Politico came out with the news mentioning that Russia demanded protection from Western sanctions for future Russian business with Iran, which in turn could spoil the ongoing US-Iran talks that may result in increased oil output from Tehran. Furthermore, Iran’s missile strike on Ukraine also favors oil buyers.

Also keeping the oil buyers hopeful are chatters surrounding Russian prosecutors’ warnings to the West and Pentagon's press secretary John Kirby’s comments suggesting Russian forces are "broadening their target sets" after rockets hit a Ukrainian military base near the Polish border overnight.

Amid these plays, S&P 500 Futures print 0.65% intraday gains whereas the US 10-year Treasury yields also portray risk-on mood with three basis points (bps) of an upside to 2.03% at the latest.

Moving on, geopolitical updates concerning Russia and Ukraine, as well as Iran and China, could direct short-term crude oil moves.

Technical analysis

Although 10-DMA restricts the black gold’s immediate upside, around $109.90 by the press time, an upward sloping support line from December 20, 2021, near $95.50, becomes the key level to watch during the quote’s further weakness.