WTI Crude Oil Falls to $70.20: Is a Bearish Breakout Imminent?
WTI Crude Oil prices continued to decline in Asian trading on Monday, falling to $70.20 as the market responded to the potential resumption of oil exports from Kurdistan.
This drop follows last week’s losses, driven by expectations that increased supply from Kurdistan could ease global supply constraints. According to Sugandha Sachdeva, founder of New Delhi-based SS WealthStreet, “The downward spiral in crude oil prices is driven by pressure from the U.S. president on Iraq to resume oil exports from Kurdistan oilfields, which could improve supply flows in global oil markets after nearly two years of disruption.”
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Iraq is expected to export 185,000 barrels per day from Kurdistan through the Iraq-Turkey pipeline once shipments resume. The Iraqi oil ministry confirmed that all necessary procedures have been completed, signaling an end to a prolonged dispute that has disrupted crude flows. The geopolitical landscape remains volatile, with ongoing talks aimed at resolving Russia’s war on Ukraine. Market participants are closely watching the upcoming European Union summit on March 6, where additional support for Ukraine and European security guarantees will be discussed.
WTI Crude Oil Technical Analysis: Bearish Momentum Persists
WTI Crude Oil is under sustained bearish pressure, currently trading at $70.20 after failing to hold above the key support level of $70.89. The price remains below the 50-day Exponential Moving Average (50 EMA) at $71.66, confirming a continued downtrend. The descending trendline further supports this bearish outlook, reflecting persistent selling pressure.
Key technical levels to watch:
Immediate Support: $70.07
Next Support: $69.28 and $68.42
Immediate Resistance: $70.89
50 EMA Resistance: $71.66
Next Resistance: $71.77
Should prices break below the $70.07 support level, a further decline towards $69.28 is likely, with $68.42 serving as the next major support zone. Conversely, a recovery above $70.89 could prompt a test of the $71.77 resistance level. For a bullish reversal, WTI would need to break above both the 50 EMA and the descending trendline.
Geopolitical Factors and Market Outlook
The geopolitical landscape continues to influence oil prices, with the market closely monitoring the outcome of U.S.-Russia talks on resolving the Ukraine conflict. A senior Russian diplomat revealed that negotiations are expected to resume this week, with global energy supplies likely to increase if sanctions are lifted. U.S. and EU sanctions on Russian oil exports have significantly impacted seaborne oil supply flows, making the outcome of these discussions crucial for market dynamics.
Meanwhile, in the Middle East, ongoing negotiations between Israel and Hamas over ceasefire terms add another layer of complexity to the geopolitical environment. The resolution of these geopolitical tensions could significantly influence oil market sentiment and price movement.
Key Insights:
Bearish Trend Continues: WTI Crude Oil is trading below the 50 EMA and descending trendline, indicating sustained bearish momentum.
Critical Support and Resistance Levels: Immediate support at $70.07 and resistance at $71.77. A decisive break below $70.07 could lead to further downside.
Geopolitical Influence: Developments in U.S.-Russia talks and Kurdistan oil exports are key market drivers.
As WTI Crude Oil consolidates near $70.20, traders are advised to monitor geopolitical developments and key technical levels. A break below $70.07 could signal a bearish continuation, while a recovery above $71.66 may indicate a potential trend reversal.
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