Crude Oil, US Crude (WTI) Talking Points
- Crude oil prices remain encapsulated within the confines of an ascending channel
- Russia-Ukraine pose an additional threat to the trajectory for both WTI and Brent.
- Higher energy costs exacerbate fears of rising inflation
Russian Troops Remain at the Border of Ukraine
Crude oil prices have resumed their move higher after falling sharply in yesterday’s session after Russia announced the alleged withdrawal of troops from the Ukrainian border. While speculation of easing tensions allowed oil bears to temporarily drive prices back towards the big level of support at $90.00, confirmation from both NATO and the White House that Russian troops had not been withdrawn allowed bulls to retaliate quickly, with WTI finding support above the $91.00 handle.
After making a fresh seven-year high on Monday, easing Russia-Ukraine tensions resulted in a temporary pull-back in prices before rebounding off of the 61.8% Fibonacci level of the historical move (2008 – 2020) at $91.00.
With approximately one-third of Russia’s gas exports to Europe bypassing the Ukraine, elevated geopolitical risks and fears of further supply constraints have supported the upward trajectory pertaining to both WTI and Brent, making prices vulnerable to further developments in the situation.
US Crude Oil (WTI) Daily Chart
Chart prepared by Tammy Da Costa using TradingView
Meanwhile, the four hour chart below illustrates how the ascending channel has formed a zone of confluency between the key psychological levels of $90.00 and $96.00. With price action trading comfortably in the within the bounds of the channel, these levels will likely continue to provide both support and resistance for the short-term move.
US Crude Oil (WTI) Four-Hour Chart
Chart prepared by Tammy Da Costa using TradingView
As the CCI (commodity channel index) lingers in overbought territory, a hold above $90.00 leaves room for the potential test of the critical $100 per barrel mark if the conflict between Russia and the Ukraine persist.
— Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707
Be the first to comment