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Market news

12 February 2024

Crude Oil remains well-bid after last week’s gains on Middle East tensions, WTI tests $77

  • Crude Oil markets remain pinned into near-term highs as geopolitical headlines weigh.
  • Gaza ceasefire hopes remain, but tensions remain high.
  • US Crude Oil production continues to rise, offsetting OPEC production caps.

West Texas Intermediate (WTI) US Crude Oil continued to test into $77.00 per barrel on Monday, with barrel bids pushing into recent highs as a potential ceasefire in the Gaza region remains elusive.

Geopolitical headlines have pushed US Crude Oil into five straight days of gains, sending WTI higher by around 6% last week. Energy markets are keeping prices on the high side heading into the new week, but it's getting difficult for barrel investors to keep attention off of record Crude Oil production in the US.

Israel rejected an immediate proposal for a ceasefire last week, keeping Crude Oil markets pinned into the high end, but negotiations are still ongoing as key nations try to keep a lid on potential spillover from geopolitical risks.

Saudi Arabia’s Energy Minister, Abdulaziz bin Salman Al Saud, noted on Monday that the Organization of the Petroleum Exporting Countries (OPEC) remains able and willing to adjust policy as needed. OPEC has faced an uphill climb in recent months as OPEC production caps get washed out by US Crude Oil production continuing to climb into record highs as the US further cements itself as the world’s largest Crude Oil producer.

US Crude Oil production reached a familiar peak in January despite cold weather snaps that shuttered some production facilities temporarily. US pumping output hit its highest levels since last November.

WTI technical outlook

WTI US Crude Oil remains well-bid, but capped just below the $77.00 key level. WTI remains up over 7% from last week’s bottom bids near $71.50, but struggles to find the bullish momentum needed to push barrel bids back into January’s peak near $79.00.

WTI continues to trade into the 200-day Simple Moving Average (SMA) near $77.30, and five straight days of WTI gains leaves US Crude Oil stuck near familiar technical highs. The long-term median 200-day SMA is capping off bullish momentum, and Crude Oil finds itself hamstrung in a consolidation zone between the 200-day SMA and the 50-day SMA near $73.25.

WTI hourly chart

WTI daily chart

 

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