WTI and Brent Crude oil prices hold steady as markets await breakout signals

WTI crude oil prices steadied around $69.81 per barrel on Monday, marking the second consecutive session of gains. The market responded positively to softer-than-expected US Personal Consumption Expenditures (PCE) inflation data, which raised hopes for further Federal Reserve rate cuts in 2025.
These developments, paired with the technical breakout pattern forming in the WTI chart, have fueled optimism for potential upward momentum in energy markets. Key support for WTI stands at $69.38, while resistance lies at $70.48. Analysts predict a breakout could propel prices toward $71.46, though failure to breach these levels may result in retesting lower supports at $68.42 and $67.69.
For Brent crude, prices are consolidating near $73.23 per barrel, with traders closely watching resistance at $73.77. The tight alignment of the 50-day and 200-day EMAs underscores market indecision. A sustained move above $73.77 could open the door to higher targets at $74.55. Conversely, a failure to hold these levels risks a retreat toward $72.83 and $71.98. Both WTI and Brent are navigating symmetrical triangle patterns, signaling a tug-of-war between bullish and bearish forces.
USOIL price movement (Nov 2024 - Dec 2024) Source: TradingView
Geopolitical Tensions Add Complexity
Global developments also weighed on crude oil markets. President-elect Donald Trump’s remarks about reasserting US control over the Panama Canal have created ripples, raising concerns about shipping rates and geopolitical stability. Simultaneously, fears of a potential US-EU trade war resurfaced after Trump threatened tariffs unless the EU increased purchases of US oil and gas. These geopolitical uncertainties compound concerns over China’s economic outlook, exacerbated by weak retail sales data and Sinopec’s projection that the country’s oil consumption will peak by 2027.
While technical indicators point toward potential upside for oil prices, market sentiment remains fragile, influenced by global economic uncertainties and geopolitical risks. Traders are keeping a close watch on upcoming economic data and key breakout levels for further clarity on the direction of crude oil prices.
In earlier coverage, we examined WTI crude oil’s dip below $69, driven by a strong US dollar and weaker demand projections from China. These factors remain critical in shaping the trajectory of oil prices.