WTI Shows Bearish Trend at European Market Open

The price of West Texas Intermediate (WTI) crude oil is declining on Tuesday during the early European trading hours. Currently, WTI is priced at $62.21 per barrel, a drop from its Monday closing value of $62.56.
Similarly, Brent crude oil is losing value, with its current trading price at $65.74, compared to the prior day’s close of $66.10.

Fundamental Factors Driving the Bearish Trend

The downward pressure on oil prices appears largely tied to easing geopolitical tensions, particularly around the Russia-Ukraine conflict. Diplomatic efforts, including potential peace talks between Russia and Ukraine, as well as US-Ukraine discussions, are reducing fears of supply disruptions from Russian oil exports. This has led to a more optimistic market outlook on supply stability, contributing to the price dip.

On the supply side, global inventories remain a concern, with markets awaiting the latest EIA report for insights into US stockpiles. Recent data suggests potential builds in inventories, signaling oversupply amid softer demand. In China, the world’s largest oil importer, refining output stayed strong in July, but refiners are facing deepening losses due to overcapacity, while fuel exports hit a 13-month high—indicating excess supply being pushed into global markets.

Additionally, falling Russian crude prices are tempting buyers like India’s state refiners, further easing supply constraints.
Demand dynamics are mixed but lean bearish. While China’s oil demand showed signs of picking up in July, broader economic uncertainties, including weaker global growth, are capping upside potential. Speculative positioning in futures markets has turned increasingly bearish, with net long positions in Brent and WTI hitting multi-month lows as traders ramp up short bets amid these factors.

Other influences include isolated disruptions, such as Hungary reporting halted Russian oil flows via the Druzhba pipeline due to a Ukrainian attack, but these have not offset the overall downward momentum. In Saudi Arabia, lower oil prices are prompting cuts to megaproject spending by the kingdom’s wealth fund, reflecting broader fiscal pressures in oil-producing nations.

Traders will monitor upcoming inventory data and any updates on diplomatic talks for further direction, but the current fundamentals point to sustained bearish risks in the near term.