WTI Crude Oil Forecast: Prices Eye $71 as Geopolitical Risks Rise

WTI crude oil is above $70/bbl and headed for its biggest weekly gain in two months. The reason is a growing geopolitical risk premium as Russia and Ukraine escalate hostilities.

Ukraine launched a second Western supplied missile into Russia this week and Russia responded by firing its first intercontinental ballistic missile at Ukraine. That’s got supply disruptions back on the radar and supporting prices.

And to top it all off OPEC+ meets on December 1st. They had planned to increase output in 2024 and 2025 but slowing global demand and weak Chinese growth has delayed the timeline. Speculation is that they will delay again and keep supply tight and prices high.

Technical Levels Signal Bullish Momentum

Technically, WTI crude oil is consolidating around $70.06, supported by a breakout above a descending trendline. Key resistance levels are in focus at $70.53, $71.36, and $72.11, while immediate support is identified at $69.47.

• 50-Day EMA: Positioned at $69.19, acting as dynamic support.

• Relative Strength Index (RSI): Currently at 58.67, signaling moderate bullish momentum but staying below overbought territory.

A close above $70.53 could pave the way for a move toward $71.36. However, any sustained drop below $69.47 or the 50-day EMA at $69.19 would signal potential downside risks.

China’s Demand and OPEC+ Decisions Loom Large

China’s economic woes are still weighing on demand. As the world’s biggest crude importer its slow growth and low consumption is a big deal for the global market. OPEC+ has already delayed its planned output increases and more could be announced at the upcoming meeting.

Traders will be watching OPEC+ closely as any decision to hold or cut will impact oil for the rest of the year.

Key Takeaways:

• Geopolitical risks between Russia and Ukraine boost crude oil’s risk premium.

• OPEC+ may postpone output increases amid China’s sluggish demand.

• Resistance at $70.53 is crucial; RSI momentum supports bullish sentiment.