West Texas Intermediate (WTI) US Oil slipped to fresh one-month lows on Friday, trading near $57.60 at the time of writing and down 1.90% on the day. Crude extended its three-day losing streak, breaking below the $58.00 mark as investors reassessed geopolitical risks in Eastern Europe amid signs that a potential peace framework in Ukraine may be taking shape.
Ukraine Peace Prospects Raise Supply Expectations
Multiple media outlets reported that Ukrainian President Volodymyr Zelensky has agreed to work on a US-backed proposal that includes territorial concessions to Russia and a reduction of Ukraine’s armed forces.
These terms, viewed as unacceptable only months ago, have strengthened expectations that a compromise could materialize sooner than anticipated.
A de-escalation in the conflict – and any subsequent easing of international sanctions on Moscow – would raise the likelihood of increased Russian crude supply, adding further downward pressure on Oil prices.
This shift comes alongside the rollout of new US sanctions on Rosneft and Lukoil, measures that markets had already largely priced in. If diplomatic progress accelerates, such sanctions could be softened, reinforcing expectations of a rise in Russian energy flows.
Weak Demand Outlook Keeps Pressure on Crude
Demand signals remain fragile. Recent US economic data has bolstered expectations for a Federal Reserve (Fed) rate cut in December, while the US Dollar (USD) has held firm.
A stronger Greenback typically weighs on USD-priced commodities, making them more expensive for overseas buyers.
Meanwhile, US Crude dynamics continue to adjust. The latest Energy Information Administration (EIA) data showed a decline in commercial Crude inventories driven by strong exports, while rising gasoline and distillate stockpiles pointed to softer domestic demand – another drag on the market.
WTI is likely to remain under broad downward pressure as long as diplomatic momentum between Russia and Ukraine improves and global demand struggles to stabilize. Any sudden shift in the geopolitical landscape could spark sharp short-term volatility.
WTI Technical Analysis: Remains Bearish Below Descending Trend Line
In the daily chart, WTI trades near $57.68. The 100-day Simple Moving Average (SMA) continues to trend lower, with price holding beneath it – reinforcing the bearish outlook.
The Relative Strength Index (RSI) has slipped to 39.82, below the 50 midpoint, highlighting weakening momentum.
Support lies near $56.00, where a breakdown would expose further downside risks.
To the upside, the descending trend line from $69.99 caps recovery attempts, with resistance aligned near $60.34. A break above this area could trigger a corrective bounce toward the 100-day SMA at $62.62.
As long as WTI remains capped below trend resistance and the declining moving average, the bias stays firmly to the downside, keeping bears in control.
