Key Moments
- WTI trades near $90.15 in early Monday European hours as expectations for increased Russian diesel supply weigh on prices.
- A staged US-Russia diesel agreement, including more than 300,000 tons immediately and multi-million-ton flows later, boosts hopes of additional supply.
- Heightened Houthi attacks on Saudi energy infrastructure and shipping keep crude market volatility elevated despite the latest pullback.
WTI Pressured by Prospects of Additional Russian Diesel Supply
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $90.15 in early European dealings on Monday, with prices sliding as traders react to expectations of increased Russian fuel deliveries following a new energy understanding between Washington and Moscow.
WTI has come under pressure after US President Donald Trump indicated that Ukraine and Russia had reached an agreement to stop targeting each other’s energy infrastructure. The ceasefire comments followed news of a US diesel-supply arrangement with Russia, raising the likelihood of more Russian product entering the market.
On Friday, the US President said he had reached a deal with Russian President Vladimir Putin for Russia to supply diesel in stages. According to the details provided, Russia would ship more than 300,000 tons of diesel immediately, followed by 500,000 tons in November, 1 million tons after that, and an additional 3 million tons afterwards.
Geopolitical Tensions: Houthi Strikes and Maritime Attack
Crude prices remain volatile as geopolitical risks in the Middle East and surrounding waters intensify. Yemen’s Iran-backed Houthi movement has increased attacks on Saudi Arabia, with two tankers reportedly struck over the weekend, according to Reuters. The Houthis claimed responsibility for a weekend strike on Saudi Arabia.
Against this backdrop, Trump warned on Saturday that Iran “will not exist” if it fails to cooperate with the US in negotiations. He also said he is weighing the possibility of joining Saudi Arabia in retaliatory action against Tehran-backed Houthis in Yemen following a deadly strike on Riyadh’s main airport.
Separately, the United Kingdom Maritime Trade Operations (UKMTO) stated on Sunday that it had reclassified an earlier incident near the Sohar anchorage in Oman as an attack, after confirmation that a tanker had been hit by a drone.
Analysts at Commonwealth Bank of Australia commented on the likely impact of continued Houthi activity, stating: “We expect the Houthis to continue their attacks on Saudi Arabian energy assets, supporting gains in the oil price and the USD.”
Market Focus on API Inventory Data
Oil traders are now turning their attention to the forthcoming American Petroleum Institute (API) weekly crude stockpiles report due later on Tuesday. Positioning ahead of the data could influence intraday price action.
A larger-than-forecast draw in crude oil inventories would typically be interpreted as a sign of firmer demand and may lend support to WTI. Conversely, a bigger-than-expected build would suggest softer demand or an oversupplied market, potentially adding to downside pressure on prices.
Gasoline and US Inflation Outlook
Higher gasoline prices are feeding into the broader US inflation narrative. TD Securities expects inflation pressures to have strengthened again in September, highlighting the impact of energy costs.
The bank’s analysts anticipate that “headline CPI strengthened again to 0.57% m/m, driven by a sharp rise in gasoline prices of 9.0%.” They also observe that “oil and gasoline prices increased again through most of September,” and estimate that “on average, the month should result in a 5.3% m/m increase in energy CPI.” TD Securities further notes that “food inflation also likely edged higher,” and cautions that “gasoline prices remain elevated and will likely keep headline CPI high in y/y terms until early 2027.”
Technical Picture: Constructive Trend Intact Above 100-Day SMA
From a technical standpoint, WTI continues to trade above the 100-day simple moving average (SMA) on the daily chart, preserving a broadly constructive bias even after pulling back from the $100 region. Prices remain above the lower Bollinger Band but below the middle band, pointing to consolidation within the upper portion of the recent volatility range. The Relative Strength Index (RSI) sits near 49, reflecting a more neutral momentum backdrop rather than a strong bearish signal.
| Technical Level | Indicator | Approximate Value | Implication |
|---|---|---|---|
| $91.90 | Bollinger middle band (resistance) | ~$91.90 | Initial topside barrier for recovery attempts |
| $98.50 | Upper Bollinger Band / recent highs | ~$98.50 | Key resistance zone that may cap further gains |
| $90.00 | Nearby pivot | ~$90.00 | Immediate area of interest on the downside |
| $85.35 | Lower Bollinger Band | ~$85.35 | More substantial support if selling pressure deepens |
| $84.10 | 100-day SMA | ~$84.10 | Break below would undermine the broader bullish bias |
On the upside, the first notable resistance aligns with the middle Bollinger Band near $91.90, while a more significant hurdle sits at the upper band around $98.50, which also coincides with recent swing highs and may limit any stronger rebound.
On the downside, the $90.00 area serves as a nearby pivot. A move lower from there would put focus on the lower Bollinger Band around $85.35 and the 100-day SMA near $84.10. A decisive break below these latter levels would weaken the prevailing constructive structure and pave the way for a deeper correction.
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