Oil Slips as 2.5M-Barrel Inventory Build and Russia Tensions Weigh on WTI
WTI crude oil stuck around $58.7 per barrel on Wednesday, a carryover from its recent slump as traders weighed simmering geopolitical...
Quick overview
- WTI crude oil remains around $58.7 per barrel amid geopolitical tensions and fresh supply data.
- Traders are cautious as talks between Russia and the US remain deadlocked, with rising tensions following an attack on a Russia-linked ship.
- US crude inventories increased by 2.5 million barrels last week, raising concerns about oversupply in the market.
- WTI is currently in a tightening triangle, indicating a potential breakout could occur soon.
WTI crude oil stuck around $58.7 per barrel on Wednesday, a carryover from its recent slump as traders weighed simmering geopolitical tensions and fresh supply data. The markets reacted with a wait-and-see attitude after the Kremlin described talks between President Vladimir Putin and US envoys as ‘useful’ but deadlocked, making no headway towards resolving the conflict in Ukraine. Despite this lack of progress, unease about risk appetite persisted.
The situation got even tenser after yet another attack on a Russia-linked ship – though no one’s claiming responsibility at this point – & Putin warned that Moscow could start targeting vessels from countries backing Ukraine if this kind of thing keeps happening. And that’s the kind of escalation that traders can’t pretend to ignore, even though markets have grown a bit numb to all the recurring headlines.
Geopolitics Bring the Pressure, Not the Support
Usually, rising geopolitical friction is a good bet for higher crude prices, but right now that dynamic isn’t working. The US has upped the ante on Venezuela, with President Donald Trump dropping hints at a possible Pentagon move against drug cartels. While that adds plenty of uncertainty, so far it hasn’t inspired any sustained buying in oil markets.
On the supply side, US industry data showed a 2.5 million-barrel build in crude inventories last week, along with a modest increase in gasoline stocks. Traders are now waiting to see if the official EIA report bears out concerns about oversupply, or tempers them if we see bigger-than-expected draws.
WTI Crude Oil (USOIL) – The Technical Picture
WTI itself is stuck in a limbo at around $58.80, caught in a tightening triangle defined by a rising trend line from November’s lows and a sloping downward trend line from the late-November peak. Price did bounce a little from $58.37, but you can see the hesitation – small candles and an upper-wick rejection right below the $59.17 resistance.
The 20-day EMA is down to $58.93, a clear sign that momentum is slowing. The RSI is at 46, and that’s looking more stable after a rough patch, suggesting that, at the moment, neither buyers nor sellers really have the upper hand.
What to Keep an Eye On
- If it goes up: A break above $59.17 could have WTI heading toward $59.99
- If it goes down: A drop below $58.37 could expose $57.71 and $57.12
- The middle ground: price is stuck right in the middle of that converging triangle
The overall picture is still pretty balanced, but the tightening suggests a directional breakout might not be far off.
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