WTI struggles around $105.50 amid fears surrounding Russia, global recession

WTI crude oil prices remain pressured around $105.50, despite rising the most in 1.5 months the previous day, as fears surrounding demand slowdown weigh on the energy benchmark. It’s worth noting, however, that geopolitical headlines appear to limit the black gold’s downside.

That said, the comments from a German Official suggesting the Group of Seven (G7) leaders’ preparedness for capping Russia's oil prices seem to recently weigh on the WTI. “Leaders of the Group of Seven rich democracies are having "very constructive" discussions on a possible cap on Russian oil imports, a German government official said on Saturday shortly before the start of the annual three-day G7 summit,” said Reuters.

Elsewhere, the US anticipates strong comments on China from the North Atlantic Treaty Organization (NATO), which in turn adds bearish bias to the oil prices due to Beijing’s position among the world’s top oil consumers. “The US is confident that NATO's new strategy document will include "strong" language on China, a White House official said on Sunday, adding that negotiations on how to refer to Beijing were still underway,” per the news from Reuters.

On a different page, International Monetary Fund (IMF) Managing Director Kristalina Georgieva crossed wires during the weekend while saying, “Further negative shocks would inevitably make US economic situation ‘more difficult’.” The IMF revised down US 2022 GDP forecasts to 2.9% versus 3.7% predicted earlier. The same helps to recall the oil sellers even after exerting downside pressure on the US dollar.

It’s worth noting that the US housing numbers and a record low sentiment figures managed to favor the market’s mood and helped Antipodeans during Friday. That said, the US New Home Sales for May, by 10.7% versus April’s revised figures of -12.0%, joined the record low print of the final reading of the University of Michigan's Consumer Sentiment Index for June, to 50.0 from 50.2 initial estimates, also drowned the US dollar on Friday.

Moving on, this week’s verdict from the Organization of the Petroleum Exporting Countries (OPEC) will be important for the oil traders amid speculations of more output. Ahead of that, today’s US Durable Goods Orders for May, expected 0.1% versus 0.5% prior, as well as Wednesday’s debate of the US and the UK and the European central bankers at the ECB Forum on Central Banking will be crucial.

Technical analysis

WTI jostles with a two-week-old resistance line, around $105.85 by the press time, as sellers trying to cheer a downside break of the previous key support line from early April, near $107.70 at the latest.