- WTI edges higher at the start of a new week, though it remains confined in a one-week-old range.
- Rising geopolitical tensions lend support to the commodity, though demand concerns cap gains.
- Oversupply worries could further act as a headwind for Oil prices amid a bearish technical setup.
West Texas Intermediate (WTI) US Crude Oil prices edge higher during the Asian session on Monday, though the uptick lacks bullish conviction. The commodity remains confined in an over one-week-old range, just above a three-month low touched last week, and currently trades around the $62.65-$62.70 region, up 0.50% for the day.
Group of Seven (G7) finance ministers discussed in a call on Friday about imposing further sanctions on Russia and possible tariffs on countries that they consider enabling its war in Ukraine. This comes on the back of Ukraine’s recent drone attack that suspended loadings from the largest port in western Russia. Adding to this, the ongoing conflict in the Middle East raised concerns about supply disruptions and supports Crude Oil prices.
Meanwhile, an unexpected rise in US crude inventories pointed to softening demand in the world’s largest Oil consumer. Apart from this, the OPEC+ decision to increase production from October continues to fuel concerns about oversupply, which is holding back traders from placing aggressive bullish bets on crude oil prices. Investors also seem reluctant and opt to wait for the FOMC decision on Wednesday before positioning for a firm near-term direction.
Looking at the technical picture, the range-bound price action might still be categorized as a bullish consolidation phase against the backdrop of the recent breakdown below the 100-day Simple Moving Average (SMA). This further backs the case for the emergence of fresh sellers at higher levels and warrants some caution before confirming that Crude Oil prices have formed a near-term bottom.
