WTI climbs further beyond $81.00/barrel mark, hits fresh YTD peak amid supply concerns
- WTI prolongs its upward trajectory on Monday and climbs to a fresh YTD peak.
- Concerns about tightening global supply continue to benefit the commodity.
- Hawkish Fed expectations might keep a lid on any further appreciating move.
West Texas Intermediate (WTI) US Crude Oil prices build on last week's strong gains of nearly 4% and gain some follow-through positive traction on Monday. The momentum lifts the black liquid to the $81.45-$81.50 area, or the highest level since November 2023 during the early part of the European session and is sponsored by worries about tightening supply.
Against the backdrop of disruptions caused by Houthi attacks in the Red Sea, Ukraine stepped up drone strikes on Russian oil refineries over the last week. Moreover, Israeli Prime Minister Benjamin Netanyahu confirmed on Sunday he will proceed with plans to push into Gaza's Rafah enclave. This comes after OPEC+ members decided to extend the production cuts of 2.2 million barrels per day through the second quarter and fueled concerns about a tight global supply, which, in turn, is seen acting as a tailwind for Crude Oil prices.
It, however, remains to be seen if bulls can maintain their dominant position or opt to take some profits off the table amid expectations that the Federal Reserve (Fed) will keep interest rates higher for longer, which might hamper economic activity and dent fuel demand. Nevertheless, the aforementioned fundamental backdrop favours bullish traders and suggests that the path of least resistance for Crude Oil prices remains to the upside. Hence, any meaningful corrective pullback might be seen as a buying opportunity and remain limited.