by Antonio Di Giacomo, Senior Market Analyst at XS.com
Crude oil prices started the week on a mostly stable note, reflecting traders’ caution amid opposing forces. Brent remains around $64.00 per barrel, while WTI trades near $59.30, in a session also marked by low trading volumes due to the U.S. holiday. This lack of momentum confirms that the market is going through a consolidation phase following the volatility seen in previous weeks.
The easing of tensions in the Middle East has helped reduce the risk premium that had recently supported prices. The lower perceived probability of an imminent supply disruption has led investors to unwind defensive positions, contributing to a more balanced market that is less reactive to extreme headlines. As a result, attention has shifted back to more structural factors, such as physical supply and expectations for global demand.
At the same time, market focus has turned to the trade front between the United States and Europe, particularly around frictions linked to strategic issues. The possibility of new tariff measures and potential retaliatory actions has increased uncertainty about economic growth, which tends to moderate energy demand projections for the coming months.
This cautious environment has also been reflected in the behavior of other financial assets. Dollar weakness and a deterioration in risk appetite have encouraged more defensive flows, affecting commodity positioning. While oil has not experienced sharp declines, it has also failed to find the catalyst needed to break decisively to the upside.
On the supply side, the market continues to face mixed signals. On the one hand, concerns persist about potential disruptions to Russian energy infrastructure, as well as the seasonal impact of cold weather on logistics and energy consumption in the Northern Hemisphere, both of which continue to support prices.
However, these bullish pressures are partially offset by a notable increase in the availability of Venezuelan crude flowing toward the U.S. Gulf Coast. The gradual reactivation of physical flows has begun to alter regional supply balances, generating particular pressure on WTI and widening the spread versus Brent. From a technical perspective, both Brent and WTI display well-defined sideways structures. WTI, in particular, has found solid support in the $58–59 area, while resistance around $61–62 has capped recovery attempts. This dynamic reinforces the perception of a market lacking a clear short-term direction.
On the macroeconomic front, the backdrop remains characterized by moderate global growth expectations. While a severe contraction in energy demand is not anticipated, markets are also not pricing in a strong enough acceleration to justify a sustained rebound in crude prices. As a result, traders continue to adjust positions tactically and remain highly dependent on new catalysts.
In conclusion, the crude oil market is in a fragile equilibrium, where bullish and bearish forces largely offset each other. The reduction in extreme risks has weakened upside momentum, while rising supply limits downside moves. In this context, prices are likely to continue fluctuating within defined ranges, awaiting a decisive factor that can provide clearer direction for crude in the coming weeks.