WTI trades sluggishly near $66.50 as markets assess potential increases in Russian supply
FUNDAMENTAL OVERVIEW:
- WTI price dips as Trump and Putin agree to pause strikes on energy infrastructure amid the Ukraine conflict.
- API data shows a 4.593-million-barrel increase in U.S. crude oil stockpiles last week.
- Rising tensions in the Middle East heighten fears of potential supply disruptions in major oil-producing regions.
West Texas Intermediate (WTI) oil prices remain under pressure for the second straight day, hovering near $66.50 per barrel during Wednesday’s Asian session. The decline is fuelled by expectations of increased Russian supply.
On Tuesday, U.S. President Donald Trump and Russian President Vladimir Putin agreed to a temporary halt in strikes on energy infrastructure amid the Ukraine conflict. However, Putin rejected a broader, month-long ceasefire proposed by Trump’s team in negotiations with Ukrainian officials in Saudi Arabia, highlighting ongoing geopolitical tensions despite the short-term truce on energy-related attacks.
As one of the world’s leading oil producers, Russia has experienced a decline in output since the onset of the war, primarily due to Western sanctions. A potential ceasefire could ease these restrictions, increasing oil supply and exerting further downward pressure on prices.
READ MORE – DAILY TECHNICAL ANANLYSIS BY CAPITAL STREET FX
Meanwhile, data from the American Petroleum Institute (API) on Tuesday painted a mixed picture of U.S. crude inventories. Crude oil stockpiles rose by 4.593 million barrels for the week ending March 14, while gasoline inventories fell by 1.71 million barrels and distillate stocks declined by 2.15 million barrels.
Despite these factors, geopolitical tensions in the Middle East continue to provide some support for oil prices. Escalating violence poses risks of supply disruptions in key oil-producing regions. U.S. President Donald Trump reaffirmed his administration’s stance on military action against Yemen’s Houthis and warned Iran of consequences for any further attacks affecting Red Sea shipping. Meanwhile, Israeli airstrikes in Gaza, following the end of a week-long ceasefire, resulted in at least 200 casualties, according to Palestinian health authorities, as reported by Reuters.
CRUDE OIL TECHNICAL ANALYSIS H4 CHART:
Technical Overview:
Crude Oil is trading within a down channel.
Crude Oil is moving below all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in Buying Zone, while the Stochastic oscillator suggests Neutral trend.
Immediate Resistance level: 67.30
Immediate support level: 66.30
HOW TO TRADE CRUDE OIL
Crude oil experienced a continuous decline before establishing temporary support, leading to a brief upward attempt. However, the price faced strong rejection from higher levels and failed to sustain its gains. Currently, it has broken below the support zone and is trading below it. At the moment, the price is making a pullback, and if it faces rejection at the resistance level, it could resume its downward trend.