Crude oil was little changed this morning, albeit with a slightly negative bias. Front-month WTI was back below $58 per barrel, having traded well north of $60 in the middle of last week. Traders were focused on the possibility of a US-brokered (although apparently Kremlin-written) deal to end the Ukraine-Russia war.
Source: TN Trader
This increased likelihood of a breakthrough deal could ultimately lead to a boost in supply should sanctions on Russian energy be removed. This will add oil to a market that is already well-stocked. While Sunday’s US-Ukraine talks were described as “productive,” uncertainty lingered, with European leaders cautioning that parts of the framework remain too generous toward Moscow.
Unfortunately, accusations of corruption within the Ukrainian government have weakened President Zelenski’s hand when it comes to negotiations, at least as far as the Trump administration is concerned.
The chart above shows the steady decline in prices over the past month. Downside pressure appears to be dominating sentiment. But crude is now testing possible support at the bottom of the downwardly sloping trading range. That could suggest some short-side profit-taking is due. But as can be seen from the daily MACD, downside momentum is picking up, and crude is far closer to neutral than oversold levels.
