WTI crude oil grinds higher past $87.00 with eyes on OPEC+ verdict, Russia
- WTI prints five-day uptrend near seven-year high, seesaws around daily top of late.
- OPEC+ is likely to keep production hike targets on the table but geopolitical tensions test the output promises.
- US Senate eyes law to levy sanctions on Russia even before Ukraine invasion, NATO raises concerns over European energy supplies.
- Off in China, no major data on Monday restricts oil moves.
WTI remains on the front foot around $87.30, up 0.76% intraday with the latest grind surrounding the daily top.
Although the black gold remains firmer around the highest levels since October 2014, an absence of Chinese traders and cautious sentiment ahead of the OPEC+ verdict, up for publishing on Wednesday, seem to challenge the quote’s recent moves. That said, OPEC+ is a group of the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia.
Oil bulls recently cheered the escalation in the geopolitical risks between Ukraine and Russia as Western policymakers tried hard to stop Moscow from war but gained no positive response. As a result, the US Senate braces for a law to levy economic sanctions on Russia while the North Atlantic Treaty Organization (NATO) said on Sunday, per Reuters, that Europe needs to diversify its energy supplies as Britain warned it was "highly likely" that Russia was looking to invade Ukraine.
On the same line is the OPEC+ inability to match the output hike targets of the 400,000 barrels per day (BPD) due to capacity constraints.
It’s worth noting that the escalating inflation fears and firmer US dollar also challenge oil buyers at the multi-month top.
Amid these plays, the benchmark US 10-year Treasury yields rose 1.6 basis points (bps) to 1.796% whereas the S&P 500 Futures drop 0.30% intraday at the latest. It should be noted that off in China restricts Asia-Pacific market moves of late.
Moving on, oil traders will keep their eyes on Russia-linked headlines for intermediate moves ahead of Wednesday’s OPEC+ decision. Also important will be Friday’s US monthly jobs report as the Fed rate hike concerns probe oil buyers, despite recently failing to do so.
Technical analysis
Although overbought RSI conditions test WTI bulls below the $90.00 threshold, the year 2021 high near $85.00 puts a floor on the commodity’s pullback moves.