WTI Crude Oil slides toward $62.00 as geopolitical tensions ease and oversupply fears mount

• WTI Crude Oil trades near $62.00, pressured by easing geopolitical tensions and a rising supply outlook.
• Trump-Zelenskyy summit raises hopes for de-escalation in the Russia-Ukraine conflict.
• WTI holds near $62.00 support with bearish technicals, trading below the 21- and 50-day SMAs, while RSI and MACD signal fading momentum

WTI Crude Oil remains under pressure on Tuesday, trading around $62.00 per barrel, as markets digested signs of de-escalation in the Russia-Ukraine conflict and positioned cautiously ahead of key macroeconomic events. The fading geopolitical risk premium, coupled with concerns over a mounting global supply glut, continues to weigh on sentiment and limit upside potential for Crude Oil prices.

Peace hopes reduce risk premium, supply overhang limits upside

The broader tone in crude markets reflects tentative optimism following Monday's high-level meeting between US President Donald Trump, Ukrainian President Volodymyr Zelenskyy, and key European leaders. Traders interpreted the summit as a diplomatic breakthrough, with discussions underway for a trilateral dialogue involving Russia, which could eventually reduce geopolitical tension and sanction-related supply disruptions.

However, the upside remains capped by persistent concerns about excess supply. The International Energy Agency (IEA) forecasts that Oil supply will outstrip demand by nearly 1.8 million barrels per day in 2025, fueled by rising production from the US, Brazil, and OPEC+ members. This imbalance continues to anchor prices, limiting the impact of any near-term demand tailwinds.

Adding to the market's caution, traders are bracing for Fed Chair Jerome Powell's address at the Jackson Hole Symposium later this week. While a dovish tone could weaken the US Dollar (USD) and marginally boost energy demand expectations through improved economic sentiment, it is unlikely to offset the drag from elevated inventories and steady output growth.

Technically, WTI Crude Oil is under pressure as it hovers near a key support at $62.00, trading below the 21-day ($64.76) and 50-day ($66.31) Simple Moving Averages. The bearish structure remains intact, and a break below this level could trigger a decline toward $60.00, with the May 8 low near $57.47 as the next downside target.

On the flip side, immediate resistance lies at $63.69 -- last week's high -- followed by the $64.00-65.00 zone, which is reinforced by downward-sloping moving averages.

Momentum indicators reinforce the bearish outlook, with the Relative Strength Index (RSI 14) holding near 38.81, showing no signs of a reversal. The Moving Average Convergence Divergence (MACD) continues to signal downside pressure, remaining below the zero line with a bearish bias. Meanwhile, the Average Directional Index (ADX 14) sits at 18.92, indicating a weak trend that could result in consolidation in the ahead sessions. Unless $62.00 holds and prompts a recovery, the path of least resistance appears to be lower.