WTI bounces off daily low, keeps the red around $85.00 amid easing geopolitical tensions

• WTI kicks off the new week on a weaker note amid easing geopolitical tensions in the Middle East. 
• The post-NFP USD buying exerts additional pressure on the commodity and contributes to the fall.
• Expectations for a fall in fuel supply from Russia and signs of improving demand help limit losses.

West Texas Intermediate (WTI) US crude Oil prices open with a bearish gap on the first day of a new week and retreat further from over a five-month peak touched on Friday. The commodity, however, trims a part of Asian session losses and currently trades around the $85.00 psychological mark, still in the red for the second successive day. 

Israel withdrew more soldiers from southern Gaza and committed to fresh talks on a potential ceasefire with Hamas, easing concerns about the risk of a further escalation of conflicts and crude supply disruptions from the Middle East. This, along with the upbeat US NFP-inspired US Dollar (USD) strength, prompts some profit-taking around Crude Oil prices, especially after the recent blowout rally witnessed over the past two months or so.

Investors, meanwhile, remain concerned about the Ukrainian drone attacks on refineries in Russia. Apart from this, the OPEC+ clampdown on some countries to increase compliance with output cuts, along with a strong demand outlook, acts as a tailwind for Crude Oil prices. The optimism is being fueled by positive economic data from China – the world's top importer – and supports prospects for the emergence of some dip-buying around Crude Oil prices. 

The aforementioned fundamental backdrop makes it prudent to wait for strong follow-through selling before confirming that the black liquid has topped out in the near term and before positioning for any meaningful corrective decline. Even from a technical perspective, the recent breakout through the previous YTD peak, around the $83.55 area favours bullish traders amid positive oscillators on the daily chart, which have now eased from overbought territory.