Recap: The crude market continued to trade within Friday’s trading range and remained mostly supported as hopes for a Russia-Ukraine peace agreement fade and geopolitical tensions increase in the Middle East. Russia has said it will toughen its stance in peace talks after it accused Ukraine of attacking the residence, an allegation that Kyiv dismissed as baseless and designed to undermine peace negotiations. Meanwhile, the market was also well supported as Saudi Arabia launched airstrikes against a Yemeni port and the UAE ended the mission of its counterterrorism units in Yemen. The oil market posted a low of $57.60 in overnight trading before it bounced off that level and traded to $58.47 in early morning trading. The market later erased some of its gains and settled in a sideways trading range in afternoon trading. The February WTI contract settled down 13 cents at $57.95 and the February Brent contract settled down 2 cents at $61.92. Meanwhile, the product markets ended the session higher, with the heating oil market settling up 2.3 cents at $2.1505 and the RB market settling up 58 points at $1.7210.
Technical Analysis: The oil market will continue to trend sideways as the market continues to weigh the Russia-Ukraine peace talks, which are facing further setbacks, and the Middle East tensions following the Saudi airstrikes in Yemen against the perceptions of an oversupplied market that will limit gains. The market is seen finding support at $57.60, $57.36, $56.91, $56.81, $56.65, $56.60, $56.41, $55.61, $55.08 and $54.89. Meanwhile, resistance is seen at $58.47, $58.88, $58.93, $60.01 and $60.12.
Fundamental News: On Monday, U.S. President Donald Trump warned Hamas of severe consequences if it does not disarm. Speaking beside Israeli Prime Minister Benjamin Netanyahu following a meeting at his Mar-a-Lago estate in Florida, President Trump said his talks with Israel’s Prime Minister focused on advancing the Gaza peace deal he brokered and addressing Israeli concerns over Iran and over Hezbollah in Lebanon. President Trump said he wanted to move to the second phase of the ceasefire deal between Israel and the Palestinian militant group Hamas reached in October after two years of fighting in Gaza, a progression that entails international peacekeeping forces deployed in the Palestinian enclave. Israel and Hamas accuse each other of major breaches of the deal and look no closer to accepting the much more difficult steps envisaged for the next phase. Hamas, which has refused to disarm, has been reasserting its control as Israeli troops remain entrenched in about half the territory. Israel has indicated that if Hamas is not disarmed peacefully, it will resume military action to make it do so. During his comments on Monday, President Trump blamed the militant group for not disarming more promptly, arguing that Israel had lived up to its side of the deal and warning that Hamas was inviting grave consequences.
Ukraine’s President, Volodymyr Zelenskiy, said that Ukraine and the so-called ‘Coalition of the Willing’ group of nations backing Kyiv plan to hold their next meetings at the start of January. He said that the countries’ national security advisers would meet in Ukraine on January 3rd and then leaders in France on January 6th. The Coalition grouping led by Britain and France includes more than 30 nations, though it was not immediately clear which would be taking part in the meetings.
The Kremlin said that a Ukrainian drone attack on a presidential residence in the Novgorod region would toughen Russia’s position on a possible peace deal. Kremlin spokesman Dmitry Peskov noted Ukraine’s denial of the attack and said that the Western media were playing along with Kyiv. He said the attack was aimed at collapsing the negotiations. In response, Ukrainian Foreign Minister, Andrii Sybiha, said that Russia had not provided any plausible evidence of its accusations.
Early Market Call – as of 8:45 AM EDT
WTI – Feb $58.43, up 48 cents
RBOB – Jan $1.7291, up 76 points
HO – Jan $2.1532, up 15 points
