WTI bears take a breather near $108.00 amid mixed concerns over Ukraine, supply crunch
- WTI steadies around one-week low after dropping the most in four months.
- Iraq, UAE and the US push for more oil output, OPEC adds to the bearish bias.
- Fears of no ceasefire between Russia and Ukraine paused oil bears of late.
- EIA inventories failed to renew bullish bias, US data, risk catalysts eyed for fresh impulse.
WTI crude oil prices stabilize around $108.00, following the biggest daily slump since late November.
The black gold’s previous pullback could be linked to the market’s increased optimism over the Russia-Ukraine ceasefire. Also exerting downside pressure on the energy prices were production commitments from OPEC and allies, including United Arab Emirates (UAE) and Iraq.
Recently, US Energy Secretary Jennifer Granholm mentioned the need to raise oil and gas production. The diplomat also said that the US is on a war footing.
It’s worth noting that the UAE and Iraq have already shown readiness to inflate production while the Eurozone earlier said to have secured fuel until winter is over. On the same line, the US policymakers are also on the run to tame the energy prices.
Elsewhere, the weekly official inventory data from the US Energy Information Administration (EIA), -1.863M versus -0.657M expected, should have also challenged the WTI bears.
Additionally, the latest headlines from Russia and the White House suggest that the noise remains on the table, at least from Moscow’s side, which in turn teased the oil buyers to take the risk.
As a result, the S&P 500 Futures and the US 10-year Treasury yields fail to extend the previous day’s gains.
Looking forward, global markets will pay close attention to the Ukraine-Russia talks in Turkey for a clear direction whereas the US CPI for February, likely rising to 7.9% from 7.5% prior, will decorate the calendar.
Technical analysis
Despite the latest pullback, WTI crude oil prices refrained from offering a daily close below the 10-DMA, around $107.65 by the press time, which in turn keeps oil buyers directed towards the north. Even if the black gold stays below $107.65, bears remain unconvinced beyond an upward sloping trend line from March 2021, near $94.20 at the latest.