Oil Swings: Geopolitical Risk Returns as West Snubs Trump’s 'Peace Commission'

Crude oil markets have experienced a classic reversal. WTI Crude dipped below the key $60 per barrel handle on Thursday following President Trump's declaration, only to rebound during Friday's Asian session.

The Diplomatic Void

The volatility stems from the inauguration of the US-led Peace Commission in Davos. However, key NATO allies—including the UK, France, and Germany—refused to sign the declaration, refusing to strip risk premiums from oil prices.

• Market Reaction: WTI rebounded to trade near $59.75, up 0.7% intraday.
• European powers and Israel were notably absent, raising doubts about enforceability.

Inventory Overhang Persists

Compounding the price action is bearish fundamental data. The EIA reported a surprise build in US crude inventories of 3.6 million barrels, alongside a massive 6 million barrel jump in gasoline stocks.

Technicals

• Technical Trend: WTI remains in a bearish trend below the psychological $60 resistance.
• Strategic Outlook: Saxo Bank strategists suggest physical market oversupply limits upside potential.