WTI trades with mild negative bias below $60.00; downside potential seems limited

WTI crude remains under modest pressure in early Asian trading on Monday, with prices unable to extend the three-week upward trend. Despite the soft tone, the benchmark US grade is still holding near Friday’s two-week high and is hovering just under the key $60.00 psychological level, edging down less than 0.10% on the day.

Geopolitical dynamics continue to support crude

According to Reuters sources, the G7 and European Union are discussing the replacement of the current price cap on Russian oil exports with a full maritime services ban. Such a move could further restrict supply from Russia, the world’s second-largest producer, providing an underlying floor for the market. Additionally, the slow progress in Russia–Ukraine peace negotiations is maintaining geopolitical risk premiums in the crude complex.

Fed expectations weigh on the US Dollar

Market consensus has tilted toward another Federal Reserve rate cut at the conclusion of this week’s two-day policy meeting on Wednesday. This expectation has kept the US Dollar pinned near its lowest levels since late October, offering support to USD-denominated commodities like crude oil and limiting the scope for deeper WTI losses. This dynamic reinforces the need for caution among bearish participants.

Supply concerns cap the upside

Despite the supportive macro backdrop, upside momentum remains constrained by renewed concerns over a potential global supply surplus. OPEC’s latest monthly report signals that global oil supply could exceed demand in 2026 due to higher expected output from OPEC+ members, including Russia. At the same time, indications of rising US crude inventories may further limit bullish follow-through.

Technical outlook favors an upside bias

Friday’s breakout and close above the 50-day Simple Moving Average has become a key constructive signal for bullish traders. This technical development suggests that the path of least resistance remains tilted upward, and any meaningful pullback is likely to be viewed as a buying opportunity rather than the start of a sustained reversal.