WTI trades with modest losses around $73.00 mark, downside potential seems limited

WTI Oil prices remain under some selling pressure for the second straight day on Monday.
Concerns over a near-term slowdown in demand continue to undermine the black liquid.
Fears of supply disruptions in the Middle East could lend support and limit deeper losses.

Haresh Menghani FXStreet

West Texas Intermediate (WTI) US Crude Oil prices drift lower for the second successive day on Monday and trade around the $73.00/barrel mark during the Asian session. The commodity, however, remains confined in a familiar trading range held over the past three weeks or so amid mixed fundamental cues, warranting caution before placing aggressive directional bets.

Extreme cold weather in the US has limited travel in large parts of the country and raised concerns about a slowdown in demand from the world’s largest fuel consumer. Furthermore, a sluggish economic recovery in China – the world's largest Oil importer – turns out to be another factor undermining the black liquid. Meanwhile, Oil markets are expected to remain well supplied in the first half of 2024, amid underwhelming production cuts from OPEC and record-high US output, and support prospects for additional near-term losses.

Investors, meanwhile, remain worried that the Israel-Hamas war could spill over into other parts of the region and disrupt Oil supply from the Middle East. This, along with the expected improvement in the global Oil demand over the next two years, is holding back bearish traders from positioning for deeper losses. In fact, both the OPEC and the International Energy Agency (IEA) last week raised the global Oil demand forecast for 2024. Apart from this, an attack on a Russian fuel export terminal over the weekend should limit losses for Oil prices.

Traders now await this week's key central bank meetings and economic readings for a fresh impetus. The Bank of Japan (BoJ) is set to announce its policy decision on Tuesday and the European Central Bank (ECB) will meet on Thursday. Apart from this, the release of the flash global PMI prints for January, along with the fourth-quarter US GDP print, will be watched for cues about fuel demand and infuse some volatility around Oil prices.

Technical levels to watch

WTI US OIL

Overview
Today last price	72.96
Today Daily Change	-0.64
Today Daily Change %	-0.87
Today daily open	73.6

Trends
Daily SMA20	72.62
Daily SMA50	73.56
Daily SMA100	79.53
Daily SMA200	77.34

Levels
Previous Daily High	74.6
Previous Daily Low	72.98
Previous Weekly High	74.6
Previous Weekly Low	70.63
Previous Monthly High	76.79
Previous Monthly Low	67.97
Daily Fibonacci 38.2%	73.6
Daily Fibonacci 61.8%	73.99
Daily Pivot Point S1	72.85
Daily Pivot Point S2	72.11
Daily Pivot Point S3	71.23
Daily Pivot Point R1	74.47
Daily Pivot Point R2	75.35
Daily Pivot Point R3	76.09

Author

Haresh Menghani

FXStreet

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

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