WTI finds resistance near $71.00, upside remains likely due to escalating supply concerns

• WTI may regain its ground due to rising geopolitical tensions involving major Oil producers, Russia and Iran.
• Iran took measures such as activating advanced centrifuges for uranium enrichment following a resolution passed by the UN atomic watchdog.
• Oil prices gained further support from increased demand in two of the world's largest Oil importers, China and India.

West Texas Intermediate (WTI) crude Oil price pauses its two-day rally, trading around $70.80 per barrel during Asian trading hours on Monday. However, downside risks to Oil prices remain limited due to escalating geopolitical tensions involving major Oil producers, Russia and Iran, which have sparked concerns over potential supply disruptions.

Last week, Oil prices edged higher as geopolitical tensions intensified following Ukraine's first attack on Russia using US and British weapons. In response, Russia launched a newly developed hypersonic ballistic missile. "The recent exchanges indicate the war has entered a new and dangerous phase, raising concerns of disruptions to supplies," analysts at ANZ, led by Daniel Hynes, stated in a note, according to Reuters.

On Thursday, Iran responded to a resolution passed by the UN atomic watchdog by initiating measures such as activating advanced centrifuges for uranium enrichment. The UN nuclear watchdog's 35-nation Board of Governors had passed the resolution, urging Iran to enhance cooperation with the agency and requesting a "comprehensive" report to press Iran into renewed nuclear negotiations.

Meanwhile, Oil prices received additional support from rising demand in two of the world's largest Oil importers, China and India. China's crude imports rebounded in November as lower prices encouraged stockpiling, while Indian refiners boosted crude throughput by 3% year-over-year to 5.04 million barrels per day (bpd) in October, driven by strong fuel export activity.