There’s No Stopping Crude Oil, As Russia Tensions Fuel WTI Uptrend

Crude oil continues to remain extremely bullish, pushing pretty close to $95 early this morning, before retreating to $92.60. US WTI crude came from a low of $-37.50 about two years ago, when the breakout of the coronavirus sent everyone into panic mode. Although, after the reversal, the price has only been going up and chances are that it will breach the $100 level soon.

There are several factors for the surge in oil prices. The expanding global economy and especially manufacturing has been a strong factor in increasing the demand for crude oil. Another factor that has been gaining importance in recent months has been the fact that the coronavirus is wearing out and turning more into common flu, which means that there won’t be such restrictions as the ones we have seen in the last two years.

Although among the trades which will be most susceptible to any headlines involving Russia and Ukraine, oil has to be on the top of the list, so this is another strong factor for the surge. As things stand, tensions are still running high but there is also still hope that there might not be a war incoming and that would prove to be bad news for oil. The EU is pushing with sanctions on Russia meanwhile which is a positive factor too:

Joint Statement by G7 Finance Ministers

• In the event that there is any further military aggression by Russia, it will be met with a swift, coordinated, forceful response
• Prepared to collectively impose economic, financial sanctions which will have massive and immediate consequences on the Russian economy

Some big talk is being put out here but again, it remains to be seen what sort of sanctions these may involve. If it is anything to do with oil and gas, it’s pretty much a double-edged sword for Europe as they are reliant on Russia’s supply. Only time will tell how this will all play out but such a strong statement will just continue to keep tensions high and uncertainty even higher.

WTI Crude Oil Daily Chart

The 20 SMA keeps pushing crude Oil higher toward $100

OPEC+ is on the bullish side too, enjoying increasing prices and they don’t plan on increasing the output any time soon. On the daily chart, we can see that the 20 SMA (gray) has been holding as support, pushing the price higher. We bought Oil last week at that moving average after the retreat and are looking to do the same this week, if the price retreats to that moving average. You can follow that trade on our live forex signals page.