WTI Crude Oil Analysis
Oil on the Fundamental Side
Crude oil prices fell on Tuesday after gains the previous day, as the focus shifted to developments in Russia and Ukraine. A peace agreement could lead to more Russian crude flowing into an already oversupplied market.
Reports indicate that the 28-point U.S. peace plan aimed at ending the war in Ukraine has been reduced to 19 points following discussions in Switzerland, in an effort to make the framework more acceptable to Ukraine. However, it remains unclear which points were cut.
Brent crude and West Texas Intermediate (WTI) both fell 0.8% to $62.20 and $58.30 per barrel, respectively, after closing higher in the previous session.
The oil market had been boosted by a general risk-on sentiment, with stocks rising and the market anticipating a greater likelihood of the U.S. Federal Reserve cutting interest rates on December 10.
Oil Technical Analysis
Crude oil is currently trading near $58.60 per barrel. A decline is currently the most likely scenario as long as it remains below the downtrend line on the daily timeframe, targeting at least $56.10. A break below $56 would likely lead to further declines towards $53.00 per barrel.
The best selling opportunities would be when prices approach the downtrend line.
This bearish scenario would be invalidated if the downtrend line is broken. In that case, we would need to break above the resistance level of $61.20 to enter a buy position, targeting $65.00 per barrel.
