WTI snaps two-day winning streak above $81.00 despite softer US Dollar

• WTI crude oil remains pressured around intraday low as it snap two-day uptrend.
• Oil markets consolidate recent gains amid China holidays, pre-Fed blackout.
• G7 pushes back review of the Oil price cap on Russian exports.
• Preliminary PMIs for January, US Advances GDP for Q4 will be crucial for fresh impulse.

WTI crude oil fades upside momentum after a two-week uptrend, down 0.65% intraday near $81.30 during early Monday, as the market’s inaction allows energy traders to pare some gains. In doing so, the black gold traders fail to cheer the softer US Dollar, as well as fears of more geopolitical tension surrounding Russian exports.

“Group of Seven (G7) officials have agreed to review the level of the price cap on exports of Russian oil in March, later than originally planned in order to give time to assess the market after more caps are placed on oil products from Russia, the U.S. Treasury said on Friday,” reported Reuters.

On the other hand, the US Dollar Index (DXY) drops for the third consecutive day as traders prepare for the next week’s Federal Open Market Committee (FOMC) monetary policy meeting amid hopes of softer rate hikes preceding the policy pivot.

That said, the latest comments from the US Federal Reserve (Fed) officials, ahead of a two-week ‘blackout period’ before the Fed meeting, favored further rate hikes and highlighted inflation fears. However, the downbeat US data and easing inflation woes underpinned the market’s expectations of softer rate hikes from the Fed, as well as the nearness to the policy pivot, which in turn weighed on the DXY.

Elsewhere, China’s one-week off due to the Lunar New Year holidays also seems to challenge the Oil buyers as the energy benchmark’s previous rally took major clues from Beijing’s reopening.

It should be noted that the market’s mixed concerns seem to challenge the Oil buyers amid a lack of major moves and the absence of Chinese traders. However, optimism surrounding the dragon nation and the dovish bias from the Fed seems to put a floor under the commodity prices.

Technical analysis

The latest pullback portrays the WTI’s inability to cross the 100-DMA hurdle, around $81.80 by the press time. However, bullish MACD signals and firmer RSI, not overbought, joins the quote’s sustained trading beyond the 50-DMA support of $78.05 to keep the Oil buyers hopeful.