WTI trims losses, trades near $73.75

West Texas Intermediate (WTI) crude oil prices kicked off the new week on a weaker note, moving away from a five-month peak and levels beyond the $75.00 psychological mark seen on Friday.

The commodity, however, trims a part of modest Asian market losses and currently trades around the $73.75-73.80 region, down 0.35% on the day.

The benchmark crude’s intraday downtick lacks any obvious fundamental catalyst and could be attributed to some profit-taking, especially after last week’s strong gains – marking the biggest in over a year.

Meanwhile, the Israel-Hamas war showed few signs of cooling, which, along with reports that Israel is considering attacking Iran’s oil production facilities, fuel concerns about supply disruptions from the Middle East. This, in turn, is seen as a key factor that acts as a tailwind for crude oil prices.

Furthermore, the upbeat US monthly employment details released on Friday raised hopes that the world’s largest economy was more resilient than initially feared.

Apart from this, hopes that the recent stimulus bonanza from China will ignite a lasting recovery and lift fuel demand in the world’s largest oil importer. This turns out to be a key factor that acts as a tailwind for crude oil prices and warrants caution for bearish traders or positioning for any meaningful slide.

Moving ahead, there isn’t any relevant market-moving economic data due for release on Monday from the US.

That said, speeches by influential FOMC members will drive the USD demand and provide some impetus to dollar-denominated commodities, including crude oil.

Apart from this, geopolitical developments surrounding the ongoing conflicts in the Middle East should contribute to producing short-term trading opportunities around the black liquid.

(Source: OANDA)