WTI Crude dives below $58.00 amid hopes of a peace deal in Ukraine
- Oil prices breach the $58,00 line and hit fresh monthly lows at $57.70.
- Hopes of a peace deal in Ukraine are weighing heavily on prices.
- Ukraine president Zelensky has agreed to work on a plan that includes territory concessions to Russia.
Oil prices depreciated for the third consecutive day on Friday, with the US benchmark West Texas Intermediate breaking below the $58.00 line for the first time since late October, as the US administration works to reach a peace deal between Russia and Ukraine.
News reports affirm that the Ukrainian president, Volodymyr Zelenskyi, has pledged to work on a peace proposal from the US that includes concessions of Ukrainian territory to Russia and a reduction of the Ukrainian armed forces, issues that had been considered a red line for the Ukrainian Government months ago.
This news comes on the day that the US sanctions on Rosneft and Lukoil come into effect, an event already discounted by the market. Investors are now considering a peace deal that would attenuate those sanctions and increase crude supply, with global demand expected to remain weak.
Technical Analysis
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WTI US OIL has broken support at $58.18, and trades at $57.80, following a 4.5% decline in the last three days. A downward-sloping trend line from $62.27 caps recoveries. The Relative Strength Index (14) prints at 32.90, near oversold and signaling persistent bearish momentum.
Immediate support is at the daily low of $57.70. Further down, the 78.6% Fibonacci retracement of the $55.97 low to the $62.33 high sits at $57.34. The deeper level offers nearby support, and a close below it would open the door to further downside.
On the topside, a recovery through $58.63 could expose $60.00, while the descending line near $60.61 would continue to cap. Momentum would improve only once RSI stabilizes back above the midline; otherwise, rebounds would remain limited.
(The technical analysis of this story was written with the help of an AI tool)
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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