WTI crude pushes beyond $78 as supply concerns outweigh demand worries
Red Sea shipping attacks and solana crypto price predictionGaza conflict maintain upward pressure on prices
OPEC reports highest spare capacity since 2016 at 6.4 million barrels/day
Energy markets witnessed WTI crude oil benchmarks testing levels above $78 per barrel during Monday's trading session, as geopolitical uncertainties overshadowed broader demand concerns. The price movement occurred during reduced liquidity with US markets closed for the federal holiday.
Persistent tensions in the Middle East continue disrupting global energy flows, with Yemen's Houthi rebels claiming responsibility for weekend attacks on commercial vessels including an India-bound oil tanker. These incidents mark the latest in a series of Red Sea shipping disruptions that began last November, critically affecting Europe-Asia trade routes.
Meanwhile, the Israel-Hamas conflict shows no signs of resolution despite ongoing mediation efforts. Negotiation teams failed to reconvene in Qatar over the weekend, diminishing hopes for an immediate ceasefire agreement in Gaza.
Analysts at ANZ highlighted an interesting counterbalance to these supply concerns - OPEC's spare production capacity has reportedly reached its highest level in eight years. The cartel currently maintains capability to increase output by approximately 6.4 million barrels daily if required, potentially mitigating some supply-side pressures.
Technical perspective on WTI crude
From a chart perspective, WTI crude maintains bullish momentum near recent highs, with the $78 level serving as immediate resistance. The commodity continues trading comfortably above its 200-hour moving average around $76.60, suggesting underlying strength.
While prices have recovered approximately 15% from December's lows near $68, they remain significantly below September's peak near $94. This indicates potential room for further upside should current geopolitical conditions persist or worsen.
The hourly chart shows WTI consolidating near the upper bounds of its recent trading range, while the daily timeframe reveals a broader recovery pattern from late 2023 lows. Market participants will monitor whether prices can sustain above key moving averages and break through overhead resistance levels.
Several technical factors suggest the current rally might face challenges at higher levels. The Relative Strength Index (RSI) approaches overbought territory on shorter timeframes, while volume patterns indicate some caution among traders at these elevated price levels.