Crude Oil, WTI, Brent – Talking Points
- Crude oil prices[1] climb to a highest level since 2014, can oil[2] claim $100?
- US winter storms contribute to fears of further supply disruptions
- Will tensions between Russia and Ukraine continue to drive prices higher?
US storms and rising tensions between Ukraine and Russia boost Oil prices
Oil[3] prices have once again reached their highest level since 2014 after breaking above $90 per barrel. As supply constraints continue to support rising prices, increased tensions between the Ukraine and Russia will likely assist in the catalyzation of price action over both the short and medium-term move.
After seven consecutive weeks of gains, investors are now querying the probability for oil prices to surpass the $100 mark, exacerbating concerns over rising inflation.
Although geopolitical risks have supported the bullish move, fears over winter storms in Texas and potential shutdowns resulting from extreme cold have posed as an additional variance of concern.
Oil – US Crude (WTI) Price Action
After rising above the key psychological level of $90, WTI crude oil has continued to rise above the 61.8% Fibonacci retracement of the historical move (2008 – 2020 move) at $91 in an effort to drive prices higher. With the next level of resistance now residing at $96.23 (the 14.4% of the 2014 – 2016 move), a break of this level may provide bulls the opportunity to test $100.
US Crude (WTI Crude) Monthly Chart
Chart prepared by Tammy Da Costa[4] using TradingView
As prices continue to track the 10-day moving average (MA), the CCI (commodity channel index) remains in overbought territory on both the monthly and daily chart with divergence potentially indicating that the momentum of the upward move may soon be losing steam.
