Despite Uptrend WTI Oil Buyers Facing Wall of Resistance

U.S. West Texas Intermediate crude oil futures are trading higher on Monday after reversing earlier weakness.

The move is partly being fueled by short-covering tied to the release of strategic reserves by consuming nations, the lack of an Iranian nuclear deal and the shrugging off a ceasefire between Saudi Arabia and the Houthi group aligned with Iran for the first time in the seven-year conflict.

At 13:40 GMT, May WTI crude oil is trading $103.33, up $4.06 or +4.09%. The United States Oil Fund ETF (USO) is at $76.77, up $2.60 or +3.50%.

Also helping to fuel the rally is a report from Reuters that showed Russian output of oil and gas condensate fell to 11.01 million barrels per day (bpd) in March from 11.06 million bpd in February. The numbers were derived by Reuters calculations based on an Interfax report on Monday.

As European customers are taking cautious approach when dealing with Russian oil, analysts expect that Russia may have to cut production this month by between 1 million bpd and 1.5 million bpd, according to Reuters.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $92.20 will change the main trend to down. A move through $116.64 will signal a resumption of the uptrend.

The minor trend is down. Friday’s low at $97.78 is a new minor bottom. A trade through $108.75 will change the minor trend to up. This will shift momentum.

The main support is a retracement zone at $94.414 to $86.52.

The market is currently testing its intermediate retracement zone at $101.32 to $106.12.

The short-term range is $126.42 to $92.20. Its retracement zone at $109.31 to $113.35 is a key upside target. This zone is controlling the near-term direction of the market.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil market into the close on Monday is likely to be determined by trader reaction to $101.32.

Bullish Scenario

A sustained move over the Fibonacci level at $101.32 will indicate the presence of buyers. If this creates enough upside momentum then look for a rally into $106.12, followed by the resistance cluster at $108.75 to $109.31.

Bearish Scenario

A sustained move under $101.32 will signal the presence of sellers. This could lead to a retest of the minor bottom at $97.78. Taking out this level will mean the selling momentum is getting stronger with the 50% level at $94.14 the next target, followed by the main bottom at $92.20.

Side Notes

Trend trading buyers are trying to form a potentially bullish secondary higher bottom. Counter-trend sellers are looking to change the main trend to down.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Oil Reaction to $101.32 Set Tone into Close

U.S. West Texas Intermediate crude oil futures are edging lower on Friday as traders await the outcome of a meeting of International Energy Agency (IEA) member nations set to discuss a release of emergency oil reserves alongside a huge planned release by the United States.

The U.S. benchmark is on course for a 12%-13% weekly decline – the sharpest in almost two years, after an earlier surge driven by the Ukraine conflict had seen prices rise by more than 30%.

At 13:05 GMT, May WTI crude oil futures are trading $99.63, down $0.65 or -0.65%. On Thursday, the United States Oil Fund ETF (USO) settled at $74.12, down $3.79 or -4.87%.

The market is still digesting the bearish news that drove prices lower the previous session. On Thursday, U.S. President Joe Biden announced a release of 1 million barrels per day (bpd) for six months, starting in May, the largest release ever from the U.S. Strategic Petroleum Reserve (SPR).

On paper the news is bearish, however, there are some doubters who believe the SPR release will have little long-term impact on prices.

“The looming flood of U.S. barrels does not change the fact that the market will struggle to find enough supply in the coming months,” PVM analyst Stephen Brennock said.

“The U.S. release pales in comparison to expectations that 3 million bpd of Russian oil will be shut in as sanctions bite and buyers spurn purchases.”

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $92.20 will change the main trend to down. A move through $116.64 will signal a resumption of the uptrend.

The minor trend is down. It turned down earlier today when sellers took out $98.44. This confirmed the shift in momentum. A trade through $108.75 will change the minor trend to up.

The market is currently trading on the weak side of its intermediate retracement zone at $101.32 to $106.12, making it resistance. The short-term resistance zone is $109.31 to $113.35.

The main range is $61.86 to $126.42. Its retracement zone at $94.14 to $86.52 is the next major downside target. This zone stopped the selling at $92.20 on March 15.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil futures contract into the close on Friday is likely to be determined by trader reaction to $101.32.

Bearish Scenario

A sustained move under $101.32 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to extend into $94.14, followed by $92.20. Taking out this level could trigger an acceleration into $86.52.

Bullish Scenario

A sustained move over $101.32 will signal the presence of buyers. If this move generates enough upside momentum then look for a labored rally with potential resistance levels at $106.12, $109.31 and $113.35. The latter is the last potential resistance before the $116.64 main top.

For a look at all of today’s economic events, check out our economic calendar.

Crude Falls in Knee-Jerk Reaction to SPR Release News

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures closed sharply lower on Thursday on new supply concerns. The catalyst behind the move was U.S. President Joe Biden’s announcement of the largest ever release from the U.S. Strategic Petroleum Reserve.

Biden’s request for oil companies to increase drilling to boost supply was a surprise since his administration has been anti-drilling since he took office in January 2021.

On Thursday, May WTI crude oil futures settled at $100.28, down $7.54 or -6.99% and June Brent crude oil finished at $104.71, down $6.73 or -6.43%. The United States Oil Fund settled at $74.12, down $3.79 or -4.87%.

Biden Authorizes Huge Release from Strategic Petroleum Reserve; Challenges Oil Companies to Increase Drilling

President Joe Biden on Thursday launched the largest release ever from the U.S. emergency oil reserve and challenged oil companies to drill more in an attempt to bring down gasoline prices that have soared during Russia’s war with Ukraine, Reuters reported.

The Details:  Starting in May, the United States will release 1 million barrels per day (bpd) of crude oil for six months from the Strategic Petroleum Reserve (SPR), Biden said.

“This is a moment of consequences and peril for the world, and pain at the pump for American families,” Biden said at an event at the White House.

“It’s also a moment of patriotism,” Biden said, as he asked oil company executives to serve their customers and American families, instead of the investors they have rewarded with billions in dividends.

He also called on Congress to make companies pay a fee if they are sitting on thousands of unused oil and gas leases and wells on public lands.

Short-Term Assessment

Biden’s announcement amounts to “too little, too late”. Furthermore, his abrupt change in policy toward drilling only causes more confusion. There are just too many unknowns like how long will the war between Russia and Ukraine go on? What’s the next move once this oil is absorbed by the market?

Biden’s 180 million-barrel release is the equivalent to about two days of global demand, and marks the third time Washington has tapped the SPR in the past six months.

It will more than cover oil exports to the United States from Russia, which Biden banned this month.

But the release will fall short of a loss of about 3 million bpd of Russian oil which the International Energy Agency (IEA) estimates will be lost to global markets amid Western sanctions and as global buyers avoid the oil.

Furthermore, the American Petroleum Institute, the sector’s main lobbying group, said the SPR tap could provide some near term supply relief, but was not a long-term solution.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Oil Straddling Retracement Zone at $106.12 – $101.32

U.S. West Texas Intermediate crude oil futures are continuing their volatile ways on Thursday, plunging more than $5 a barrel early in the session on news the United States was considering the release of up to 180 million barrels from its strategic petroleum reserve (SPR), the largest in the near 50-year history of the SPR.

At 07:31 GMT, May WTI crude oil futures are trading $102.49, down $5.33 or -4.94%. On Wednesday, the United States Oil Fund ETF (USO) settled at $77.87, down $1.72 or -2.26%.

It seems every day, crude oil traders have to deal with a new fundamental event. This is helping to create the volatility that short-term traders need to flip back-and-forth between long and short biases. But it’s hurting the long-term outlook of the market.

On Thursday, the bearish theme is being fueled by the release of oil from the U.S. SPR. Later today, U.S. President Joe Biden is expected to give remarks regarding his administration’s actions aimed at lowering gasoline prices that have risen to records following Russia’s invasion of Ukraine.

The limited sell-off early Thursday suggests that despite the massive size of the release, it may not be enough to fill the entire short-fall in supply that is helping to drive gasoline prices higher. It may take additional help from other countries to drive crude oil prices substantially lower, but this is a possibility since the International Energy Agency (IEA) member countries are set to meet on Friday to decide on a collective oil release.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. A trade through $116.64 will signal a resumption of the uptrend. A trade through $92.20 will change the main trend to down.

The minor trend is up. A trade through the minor top will indicate the buying is getting stronger. A trade through $98.44 will change the minor trend to down. This will confirm the shift in momentum.

The main range is $61.86 to $126.42. Its retracement zone at $94.14 to $86.52 is controlling the near-term direction of the market. It stopped the selling at $92.20 on March 15.

The intermediate range is $85.81 to $126.42. The market is currently straddling its retracement zone at $106.12 to 101.32.

The short-term range is $126.42 to $92.20. Its retracement zone at $109.31 to $113.35 is a potential upside target and trigger point for an acceleration to the upside.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil market on Thursday is likely to be determined by trader reaction to $101.32.

Bullish Scenario

A sustained move over $101.32 will indicate the presence of buyers. If this creates enough upside momentum then look for a labored rally with potential targets coming in at $106.12, $109.31 and $113.35.

Bearish Scenario

A sustained move under $101.32 will signal the presence of sellers. This could trigger a quick break into the minor bottom at $98.44. Taking out this level could trigger an acceleration into the major 50% level at $94.14. This is the last support before the main bottom at $92.20.

For a look at all of today’s economic events, check out our economic calendar.

WTI Oil Reaction to $106.12 – $101.32 Sets Near-Term Course

U.S. West Texas Intermediate crude oil futures are edging higher on Wednesday, rebounding from this week’s steep losses on renewed worries over supply tightness and the growing prospect of new Western sanctions against Russia. Gains could be limited, however, as signs of progress emerged from peace talks between Moscow and Kyiv.

At 09:58 GMT, May WTI crude oil futures are trading $106.20, up $1.96 or +1.88%. On Tuesday, the United States Oil Fund ETF (USO) settled at $76.13, up $1.60 or +2.15%.

Although there is some optimism that peace could break out in Ukraine, if relations with Europe worsen and an oil embargo is put in place, the market would see an additional 1 million barrels per day of Russian production at risk. Furthermore, according to consultancy JBC Energy, “The United States and its allies are planning new sanctions on more sectors of Russia’s economy that are critical to sustaining its invasion of Ukraine, including military supply chains.”

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the confirmation of the closing price reversal top on March 24.

A trade through $116.64 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $92.20 will change the main trend to down.

The main range is $61.86 to $126.42. Its retracement zone at $94.14 to $86.52 is major support. This area stopped the selling at $92.20 on March 15.

The intermediate range is $85.81 to $126.42. The market is currently trading inside its retracement zone at $106.12 to $101.32.

The short-term range is $126.42 to $92.20. Its retracement zone at $109.31 to $113.35 is the next upside target. This zone will determine whether the rally continues or fails.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil market on Wednesday is likely to be determined by trader reaction to $106.12.

Bullish Scenario

A sustained move over $106.12 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into $109.31 to $113.35. This is the last resistance before the $116.64 main top. This price is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $106.12 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to extend into $101.32. This is the last potentially support before yesterday’s low at $98.44. Taking out this level could drive the market into $94.14, followed by $92.20. A move through this level will change the main trend to down.

For a look at all of today’s economic events, check out our economic calendar.

WTI Oil: Main Trend Up, Momentum Down Creating Choppy Trade

U.S. West Texas Intermediate crude oil futures are trading higher on Tuesday as traders try to claw back yesterday’s steep losses. The catalysts behind the move are worries over a supply disruption in Kazakhstan and bullish comments from an OPEC+ official.

Gains are being capped, however, by a lockdown in Shanghai to curb rising coronavirus cases, which is expected to hit fuel demand in China, the world’s biggest importer.

At 11:12 GMT, May WTI crude oil futures are trading $107.32, up $1.36 or +1.28%. On Monday, the United States Oil Fund ETF (USO) settled at $74.57, down $6.17 or -7.64%.

Two sources told Reuters that Kazakhstan’s giant Tengiz and Kashagan fields cut oil output on March 27 after huge drops in intake to the Caspian Pipeline Consortium (CPC) pipeline due to maintenance on its terminal.

Reuters also reported that producer group OPEC+ was also expected to stick to its pledge for a modest rise in May at this week’s meeting, despite a surge in prices due to the Ukraine crisis and calls from the United States and other consumers for more supply.

United Arab Emirates energy minister Suhail al-Mazrouei said on Tuesday that the mission of OPEC+ was to stabilize markets and come up with as much supply as possible.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of a closing price reversal top and secondary lower top on March 24.

A trade through $116.64 will negate the potentially bearish chart patterns and signal a resumption of the uptrend. A move through $92.20 will change the main trend to down.

The main range is $61.86 to $126.42. Its retracement zone at $94.14 to $86.52 is major support. It stopped the selling at $92.20 on March 15.

The intermediate range is $85.81 to $126.42. Its retracement zone at $106.12 to $101.32 is also support. It stopped the selling at $102.83 on March 28.

The short-term range is $126.42 to $92.20. Its retracement zone at $109.31 to $113.35 is the next upside target and potential resistance. It was tested successfully last week.

Daily Swing Chart Technical Forecast

The direction of the June WTI crude oil market on Tuesday is likely to be determined by trader reaction to $106.12.

Bullish Scenario

A sustained move over $106.12 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into $109.31 to $113.35.

Overcoming $113.35 will indicate the buying is getting stronger. This could lead to a test of the main top at $116.64. This is also the trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $106.12 will signal the presence of sellers. This could lead to a labored break with potential support levels a minor pivot at $104.42, a low at $102.83 and a Fibonacci level at $101.32.

The Fib level at $101.32 is a potential trigger point for an acceleration to the downside with $94.14 to $92.20 the next targets.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Oil Forms Potentially Bearish Secondary Lower Top

U.S. West Texas Intermediate crude oil futures are edging lower early Tuesday, weighed down as Ukraine and Russia headed for peace talks and on fears of a drop in fuel demand in China after the financial hub of Shanghai shut down to curb a surge in COVID-19 cases.

At 05:11 GMT, May WTI crude oil is at $104.51, down $1.45 or -1.37%. On Monday, the United States Oil Fund ETF (USO) settled at $74.57, down $6.17 or -7.64%.

Ukraine and Russia were set to meet in Istanbul on Tuesday for their first peace talks in over two weeks. Prices are down because an end to the war could lead to the easing of sanctions or avoidance of Russian oil by the West.

Meanwhile, Shanghai’s two-stage lockdown over nine days is expected to hit fuel demand in China, the world’s largest oil importer.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on March 24. Furthermore, a potentially bearish secondary lower top has formed.

A trade through $116.64 will negate the chart patterns and signal a resumption of the uptrend. The main trend will change to down on a trade through $92.20.

The minor range is $92.20 to $116.64. The market is currently straddling its pivot at $104.42.

On the upside, resistance is a 50% level at $106.12, a 50% level at $109.31 and a Fibonacci level at $113.35.

On the downside, support is a 50% level at $104.42 and a Fibonacci level at $101.32.

The Fib level at $113.35 is a potential trigger point for an acceleration to the upside. The Fib level at $101.32 is a potential trigger point for an acceleration to the downside.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil market on Tuesday is likely to be determined by trader reaction to the pivot at $104.42.

Bullish Scenario

A sustained move over $104.42 will indicate the presence of buyers. The first upside target is $106.12. Over taking this level will indicate the buying is getting stronger with $109.31 the next level. This is a potential trigger point for an acceleration into $113.35.

Bearish Scenario

A sustained move over $104.42 will signal the presence of sellers. The first downside target is $101.32. This level is a potential trigger point for an acceleration to the downside with the major 50% level at $94.14 the next target. This is the last potential support before the $92.20 main bottom. Taking out this level will change the main trend to down.

For a look at all of today’s economic events, check out our economic calendar.

Rangebound WTI Oil Strong Over $113.35, Weak Under $109.31

U.S. West Texas Intermediate crude oil futures posted a choppy two-sided trade before closing higher on Friday.

Pressuring the market early in the session were concerns over a U.S.-Iran nuclear deal, which would’ve brought new supply into the global market. Sellers were also encouraged by the news of a possible release of oil reserves by the United States.

On Friday, May WTI crude oil futures settled at $113.90, up $1.56 or +1.39%. The United States Oil Fund ETF (USO) finished at $80.76, up $1.01 or +1.27%. The U.S. benchmark also posted its first weekly gain in three weeks, gaining 8.8%.

Following the early loss, the market rebounded more than 1% as traders assessed the impact of a missile attack on an oil distribution facility in Saudi Arabia. The attack comes just five days after the Houthi group fired missiles and drones at Saudi energy and water desalination facilities, causing a temporary drop in output at a refinery.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum turned lower following the confirmation of Thursday’s closing price reversal top.

A trade through $116.64 will negate the closing price reversal top and signal a resumption of the uptrend. A move through $92.20 will change the main trend to down.

The short-term range is $126.42 to $92.20. The market settled just above its retracement zone at $113.35 to $109.31, making it potential support.

The intermediate range is $85.81 to $126.42. Its retracement zone at $106.12 to $101.32 is additional support. Inside this zone is a minor 50% support level at $104.42.

The major support is the retracement zone at $94.14 to $86.52.

Short-Term Outlook

The short-term direction of the May WTI crude oil futures contract is likely to be determined by trader reaction to $113.35 and $109.31.

Bullish Scenario

Look for the upside bias to continue on a sustained move over $113.35. Overtaking this level could trigger a surge into $116.64.

Overtaking $116.64 will not only reaffirm the uptrend, but it could trigger an acceleration to the upside with $126.42 the primary upside target.

Bearish Scenario

A sustained move under $109.31 will be a sign of weakness. This could lead to a labored break with potential support levels coming in at $106.12, $104.42 and $101.32.

The Fibonacci level at $101.32 is a potential trigger point for an acceleration to the downside with $94.14 the first target, followed by the main bottom at $92.20.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Has to Hold $113.35 to Sustain Upside Momentum

U.S. West Texas Intermediate crude oil futures are edging lower after posting a volatile two-sided trade earlier in the session on Thursday.  After hitting its highest level in more than two weeks shortly after the opening on worries about tighter supply, the market turned lower as traders reacted to renewed concerns over fresh supply amid prospects of a new Iran deal.

At 09:46 GMT, May WTI crude oil futures are trading $114.68, down $0.25 or -0.22%. This is down from an intraday high of $116.64. On Wednesday, the United States Oil Fund ETF (USO) settled at $81.95, up $3.39 or +4.32%.

The oil market is being supported this week as worries over supply disruptions intensified following Russia’s invasion of Ukraine. Additionally, Russia’s deputy prime minister said oil supplies could be stopped for two months following a report that a major pipeline had to be shut down due to storm damage.

On the bearish side, White House national security adviser Jake Sullivan said on Wednesday the United States and its allies have made progress in Iran nuclear talks but issues remain.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at $116.64 will signal a resumption of the uptrend. A move through the main top at $126.42 will reaffirm the uptrend.

A trade through $92.20 will change the main trend to down. This is highly unlikely but the market is up seven sessions from its last main bottom, which puts it inside the window of time for a potentially bearish closing price reversal top.

The short-term range is $126.42 to $92.20. The market is currently trading on the strong side of its retracement zone at $109.31 to $113.35, making it support.

The intermediate range is $85.81 to $126.42. Its retracement zone at $106.12 to $101.32 is another support layers.

The main support is the retracement zone at $94.14 to $86.52.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil futures market on Thursday is likely to be determined by trader reaction to $114.93.

Bullish Scenario

A sustained move over $114.93 will indicate the presence of buyers. Taking out the intraday high at $116.64 will indicate the buying is getting stronger. If this move creates enough upside momentum then look for a potential acceleration into the main top at $126.42.

Bearish Scenario

A sustained move under $114.93 will signal the presence of sellers. Taking out the short-term Fibonacci level at $113.35 will indicate the selling pressure is getting stronger. This could trigger a break into the short-term 50% level at $109.31.

If $109.31 fails then look for the selling to possibly extend into the intermediate retracement zone at $106.12 to $101.32. Since the main trend is up, buyers could step in on a test of this area.

Side Notes

Due to the prolonged move up in terms of price and time, a close below $114.93 will form a closing price reversal top. This won’t change the main trend to down, but if confirmed, it could trigger the start of a 2-3 day correction.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Oil Trading on Strong Side of Key Retracement Zone

U.S. West Texas Intermediate crude oil futures are at their high of the week on Wednesday, underpinned by supply delivery concerns in Russia and a drop in U.S. inventories according to a private industry group. Traders are also awaiting the release of the weekly U.S. government inventories report at 14:30 GMT. It is expected to show a drawdown.

At 13:22 GMT, May WTI crude oil futures are trading $113.36, up $4.09 or +3.74%. The United States Oil Fund ETF (USO) is expected to open higher. On Tuesday, it settled at $78.58, down $0.96 or -1.21%.

Oil prices are being supported by a disruption of Russian and Kazakh crude exports via the CPC pipeline. Additionally, the latest data from the American Petroleum Institute (API) showed U.S. crude stocks fell by 4.3 million barrels for the week-ended March 18.

The U.S. Energy Information Administration (EIA) report is expected to show a drawdown of about 700,000 barrels of crude oil.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend resumed on Wednesday when buyers took out yesterday’s high, negating the potentially bearish closing price reversal top.

A trade through $92.20 will change the main trend to down. A move through $126.42 will reaffirm the uptrend.

The short-term range is $126.42 to $92.20. The market is currently trading on the strong side of its retracement zone at $113.35 to $109.31, making it support.

Additional support is the retracement zone at $106.12 to $101.32.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil futures contract is likely to be determined by trader reaction to the retracement zone at $113.35 to $109.31.

Bullish Scenario

A sustained move over $113.35 will indicate the presence of buyers. This is a potential trigger point for an acceleration to the upside with $126.42 the next major upside target.

Bearish Scenario

A sustained move under $113.35 will indicate the buying is weakening. This could lead to a test of the 50% level at $109.31. A failure to hold this level will signal the presence of sellers. This could trigger an acceleration into $106.12 to $101.32.

Side Notes

As mentioned earlier in the week, trader reaction to $109.31 to $113.35 will determine the near-term direction of the May WTI crude oil futures contract.

A sustained move over $113.35 could trigger an acceleration to the upside.

A sustained move under $109.31 will indicate that aggressive counter-trend are trying to form a potentially bearish secondary lower top.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Rally Stalls as EU Divided on Russian Ban

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading flat after giving back earlier gains and actually moving lower during an intraday period of heightened volatility.

Monday’s more than 7% surge was fueled by reports of a potential European Union (EU) oil embargo on Russia. Today’s early weakness was the result of a split vote in the EU. Nonetheless, persistent supply risks limited the decline and could actually lead to higher prices later in the session.

At 12:32 GMT, May WTI crude oil futures are trading $110.88, up $0.91 or +0.83%. June Brent crude oil is at $113.08, up $1.16 or +1.04%. On Monday, the United States Oil Fund ETF (USO) settled at $79.53, up $4.89 or +6.55%.

Numerous factors are also helping to underpin prices including an on-going U.S. ban on Russian crude oil and oil products, threats to supply from the war in Ukraine, attacks by Yemen’s Iran-aligned Houthi group on Saudi energy, and low U.S. supply.

Bullish Factor:  Threats to Supply Due to War in Ukraine

The EU and allies have already imposed a plethora of measures against Russia, including freezing its central bank’s assets.

At the start of the week, Ukraine defied a Russian demand that its forces lay down arms before dawn on Monday in Mariupol, where hundreds of civilians have been trapped in a city under siege. With little sign of the conflict easing, the focus returned to whether the market would be able to replace Russian barrels hit by sanctions.

Essentially, optimism over progress is talks to achieve a ceasefire in Ukraine is beginning to erode, which is helping to support prices.

Bullish Factor:  Iran-aligned Houthi Attack on Saudi Arabia Oil Facilities

Crude oil traders are also on edge after a Saudi-led coalition said early on Sunday that the Iran-aligned Houthi group launched four attacks on the kingdom that damaged civilian cars and homes but caused no casualties.

The Saudi state news agency (SPA) said one attack targeted a water desalination plant in the city of Al-Shaqeeq, an Aramco facility in Jizan, a power station in the southern Dhahran al Janub city, and a gas facility in Khamis Mushait.

State television al-Ekhbariya later cited the coalition as saying it had intercepted and destroyed three drones that targeted economic facilities. The coalition also foiled an attack on an Aramco Liquefied Natural Gas (LNG) facility in the Saudi city of Yanbu, state television reported.

Traders should continue to monitor this situation for any signs of escalation that directly limits the supply of crude oil.

Short-Term Outlook

Prices are expected to remain underpinned over the short-run, but traders could face some headwinds. For example, European Union foreign ministers are split on whether to join the United States in banning Russian oil. Some countries, including Germany, say the bloc is too dependent on Russia’s fossil fuels to withstand such a step.

A strong dollar is also making crude more expensive for other currency holders and tends to weigh on risk appetite.

Meanwhile, the focus later in the session will be on the latest round of U.S. inventory data, which analysts expect to show no change in crude oil stocks. The American Petroleum Institute (API), an industry group, issues its supply report later on Tuesday at 20:30 GMT.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Reaction to $109.31 – $113.35 Sets Near-Term Course

U.S. West Texas Intermediate crude oil futures are trading higher early Tuesday on reports that some European Union (EU) nations are considering imposing sanctions on Russian oil and oil products. The market is also being underpinned by supply concerns after an attack on Saudi oil facilities over the weekend.

At 01:02 GMT, May WTI crude oil is trading $112.06, up $2.09 or +1.90%. On Monday, the United States Oil Fund ETF (USO) settled at $79.53, up $4.89 or +6.55%.

According to reports, European foreign ministers are split on whether to join the United States in sanctioning Russian crude oil, with some countries including Germany arguing that the bloc is too dependent on Russia’s fossil fuels.

In other news, Saudi Arabia has warned it would not bear responsibility for disruptions to global oil supply following attacks on its oil facilities by Iranian-aligned Houthis.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $126.42 will reaffirm the uptrend. A move through $92.20 will change the main trend to down.

The short-term range is $126.42 to $92.20. The market is currently testing its retracement zone at $109.31 to $113.35.

The intermediate range is $85.81 to $126.42. WTI crude is trading on the strong side of its retracement zone at $106.12 to $101.32, making it support.

The main range is $61.86 to $126.42. Its retracement zone at $94.14 to $86.52 is the major support. It stopped the selling at $92.20 on March 15.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil market on Tuesday is likely to be determined by trader reaction to $109.97.

Bullish Scenario

A sustained move over $109.97 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the Fibonacci level at $113.35. This is a potential trigger point for an acceleration to the upside with $126.42 the next major target.

Bearish Scenario

A sustained move under $109.97 will signal the presence of sellers. The first target is the 50% level at $109.31.

If $109.31 fails then look for the selling to possibly extend into the retracement zone at $106.12 to $101.32.

Side Notes

Trader reaction to $109.31 to $113.35 is critical to the near-term structure of the market. Aggressive counter-trend sellers are going to try to form a potentially bearish secondary lower top on a test of this level.

Bullish trend traders are going to try to trigger a breakout over $113.35 with $126.42 the primary upside target.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Oil: Next Major Target Zone is $109.31 – $113.35

U.S. West Texas Intermediate crude oil futures are trading sharply higher on Monday on reports European Union nations were considering joining the United States in a Russian oil embargo and after a weekend attack on Saudi oil facilities.

Expectations of a further escalation of the war is also helping to drive prices higher after Ukraine’s deputy prime minister Jryna Vershchuk, early Monday said there was no chance the country’s forces would surrender in the besieged eastern port city of Mariupol.

At 10:36 GMT, May WTI crude oil futures are trading $107.38, up $4.29 or 4.16%. On Friday, the United States Oil Fund ETF (USO) settled at $74.69, up $1.01 or +1.36%.

In other news, the latest report from the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+, showed some producers are still falling short of their agreed supply quotas.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $92.20 will change the main trend to down. A move through $126.42 will signal a resumption of the uptrend.

The main range is $61.86 to $126.42. Its retracement zone at $94.14 to $86.52 is support. This zone stopped the selling at $92.20 on March 15.

The short-term range is $85.81 to $126.42. The market is currently trading on the strong side of its retracement zone at $106.12 to 101.32, making it support.

The minor range is $126.42 to $92.20. Its retracement zone at $109.31 to $113.35 is the next upside target.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil market on Monday is likely to be determined by trader reaction to the 50% level at $106.12.

Bullish Scenario

A sustained move over $106.12 will indicate the presence of buyers. The first upside target is the minor 50% level at $109.31. Overtaking it will indicate the buying is getting stronger with the Fibonacci level at $113.35 the next likely target. This is a potential trigger point for an acceleration to the upside with $126.42 the next major target.

Bearish Scenario

A sustained move under $106.12 will signal the presence of sellers. The first downside target is the short-term Fibonacci level at $101.32. This is a potential trigger point for an acceleration to the downside with the next target the major 50% level at $94.14, followed by the main bottom at $92.20.

Side Notes

Trader reaction to the retracement zone at $109.31 to $113.35 will determine the near-term direction of the May WTI futures contract.

Bullish trend traders are going to try to trigger a breakout over $113.35 in an effort to retest the main top at $126.42. Bearish counter-trend traders are going to try to form a potentially bearish secondary lower top. Their main objective is to turn the main trend down.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Crude Buyers Hoping to Fuel Breakout Over $101.32

U.S. West Texas Intermediate crude oil futures are edging higher on Thursday after the International Energy Agency (IEA) issued a potentially bullish report on Russian crude oil supply. The market is also being supported by a weaker U.S. Dollar, which fell after the U.S. Federal Reserve raised its benchmark interest rate as expected.

At 12:21 GMT, May WTI crude oil futures are trading $99.04, up $5.45 or +5.82%. On Wednesday, the United States Oil Fund ETF (USO) settled at $68.20, down $0.43 or -0.63%.

According to the IEA, three million barrels a day (bpd) of Russian oil and products could be shut in from next month. The supply loss would be far greater than an expected drop in demand of one million bpd triggered by higher fuel prices.

The oil market largely shrugged off a decision by the U.S. Federal Reserve on Wednesday to raise interest rates by one-quarter of a percentage point, as anticipated.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $85.81 will change the main trend to down. A move through $126.42 will signal a resumption of the uptrend.

The minor trend is also up. A trade through $88.49 will change the minor trend to down. This will shift momentum.

The main range is $61.86 to $126.42. Its retracement zone at $94.14 to $86.52 is support. This area stopped the selling at $92.20 on March 15.

The first resistance zone is $101.32 to $106.12. The primary upside target, however, is the retracement zone at $109.31 to $113.35.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil futures contract on Thursday is likely to be determined by trader reaction to the main 50% level at $94.14.

Bullish Scenario

A sustained move over $94.14 will indicate the presence of buyers. The first upside target is the Fibonacci level at $101.32.

Taking out $101.32 will indicate the buying is getting stronger with the next target area a pair of 50% levels at $106.12 – $109.31.

Bearish Scenario

A sustained move under $94.14 will signal the presence of sellers. Taking out the low at $92.20 will indicate the selling is getting stronger. This could trigger a break into the Fibonacci level at $86.52, which is the last support before the $85.81 main bottom.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Oil Trying to Form Support Base at $94.14 – $86.52

U.S. West Texas Intermediate crude oil futures are trading flat on Wednesday after giving back earlier gains. After a sharp break at the start of the week, the market may be attempting to establish a support base, but today’s early trade suggests investor indecision and impending volatility.

At 11:13 GMT, May WTI crude oil futures are trading $94.86, up $0.07 or +0.07%. On Tuesday, the United States Oil Fund ETF (USO) settled at $68.57, down $4.27 or -5.86%.

Mixed fundamentals may also be behind today’s early two-sided trade. Helping to underpin prices are easing concerns over slowing demand in China, while signs of progress in Russia-Ukraine peace talks capped gains.

Traders will be watching today’s U.S. Energy Information Administration (EIA) weekly inventories report amid supply concerns. It is expected to show a 1.8 million barrel drawdown.

Late Tuesday, the American Petroleum Institute (API) reported an unexpected jump in crude stockpiles during the week-ended March 11. Crude inventories rose 3.8 million barrels versus an estimate calling for a draw of 1.9 million barrels.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $85.81 will change the main trend to down. A move through $126.42 will signal a resumption of the uptrend.

The minor trend is also up. A trade through $88.49 will change the minor trend to down. This will shift momentum to the downside.

The main range is $61.86 to $126.42. The market is currently testing its retracement zone at $94.14 to $86.52. This zone stopped the selling at $92.20 on Tuesday.

On the upside, potential resistance is layers of retracement levels at $101.32 to $106.12 and $109.31 to $113.35.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil futures contract on Wednesday is likely to be determined by trader reaction to $94.14.

Bullish Scenario

A sustained move over $94.14 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the retracement zone at $101.32 – $106.12.

Bearish Scenario

A sustained move under $94.14 will signal the presence of sellers. The first downside target is $92.20. If this level fails then look for the selling to possibly extend into the minor bottom at $88.49, followed by a Fibonacci level at $86.52 and a main bottom at $85.81

For a look at all of today’s economic events, check out our economic calendar.

May WTI Buyers Could Show Up on Test of $94.14-$86.52

U.S. West Texas Intermediate crude oil futures are trading lower on Tuesday after plummeting during the overnight session. The selling pressure is being fueled by long liquidation as speculators continue to reduce positions amid talk of a renewed nuclear deal between the United States and Iran, and ceasefire talks between Russia and Ukraine

At 12:47 GMT, May WTI crude oil futures are trading $95.13, down $6.05 or -5.98%. On Monday, the United States Oil Fund ETF (USO) settled at $72.82, down $3.58 or -4.69%.

Essentially it all comes down to supply and demand. Ceasefire talks and more oil from Iran is easing fears of supply disruptions, while surging COVID-19 cases in China fueled concerns about slower demand.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $85.81 will change the main trend to down. A move through $126.42 will signal a resumption of the uptrend.

The minor trend is also up. A trade through $88.49 will change the minor trend to down. This will also shift momentum.

The short-term range is $85.81 to $126.42. The market is currently trading on the weak side of its retracement zone at $101.32 to $106.12, making it resistance.

The main range is $61.86 to $126.42. Its retracement zone at $94.14 to $86.52 is currently being tested. It is potential support.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil futures contract on Tuesday is likely to be determined by trader reaction to the main 50% level at $94.14.

Bullish Scenario

A sustained move over $94.14 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a possible short-term retest of the retracement zone at $101.32 to $106.12.

Bearish Scenario

A sustained move under $94.14 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the Fibonacci level at $86.52. This is the last key support before the $85.81 main bottom.

Side Notes

The price action suggests that speculations encouraged by retail brokers reading the headlines bought crude near the top after President Biden announced the ban on Russian oil and oil exports. Talk about “Buy the Rumor, Sell the Fact.” I now expect these speculators to sell or liquidate these losing trades in a value area like $94.14 to $86.52. Professionals are likely to be looking to buy this break for another run up.

We won’t know if we have a major top until the trend changes to down, or a secondary lower top is formed so be ready of a volatile two-sided move.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Crude Oil Selling Could Accelerate Under $99.55

U.S. West Texas Intermediate crude oil futures are edging lower on Monday as investors wagered on hopes that diplomatic efforts by Ukraine and Russia will lead to a quick end to the military conflict between Russia and Ukraine. Meanwhile, a surge in Omicron cases in China spooked traders enough to pare long positions on fears of lower demand.

At 13:20 GMT, May WTI crude oil futures are trading $101.82, down $4.48 or -4.21%. On Friday, the United States Oil Fund ETF (USO) settled at $76.35, up $2.29 or +3.09%.

According to Reuters, Ukrainian and Russian negotiators are set to talk again on Monday via video link. Negotiators had given their most upbeat assessments after weekend negotiations, suggesting there could be positive results within days.

Reuters also reported that China, the world’s largest crude oil importer and second largest consumer after the United States, is seeing a surge in COVID-19 cases, as the highly transmissible Omicron variant spreads to more cities, triggering outbreaks from Shanghai to Shenzhen.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $126.42 will signal a resumption of the uptrend. A move through $85.81 will change the main trend to down.

The minor trend is also up. A trade through $88.49 will change the minor trend to down.

The market has been consolidating for three sessions slightly above the March 9 low at $99.55. This price could be the trigger point for an acceleration to the upside.

The short-term range is $85.81 to $126.42. The market is currently testing the lower end of its retracement zone at $106.12 to $101.32.

The minor range is $126.42 to $99.55. Its retracement zone at $112.99 to $116.16 is the nearest upside target area.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the May WTI crude oil futures contract on Monday is likely to be determined by trader reaction to the short-term Fibonacci level at $101.32.

Bearish Scenario

A sustained move under $101.32 will indicate the presence of sellers. The first target is last week’s low at $99.55. This price is a potential trigger point for an acceleration to the downside with the next targets a minor bottom at $88.49 and the main bottom at $85.81.

Bullish Scenario

A sustained move over $101.32 will signal the presence of buyers. If this creates enough upside momentum then look for a surge into the 50% level at $106.12.

Overtaking $106.12 will indicate the buying is getting stronger. This is a potential trigger point for an acceleration into $112.99 to $116.16.

For a look at all of today’s economic events, check out our economic calendar.

IEA, OPEC Likely to Lower Crude Supply Forecasts

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures went on a volatile, two-sided trade last week before posting a potentially bearish closing price reversal top. The chart pattern won’t change the trend to down, but it could trigger the start of a 2 to 3 week correction.

The trading action could just be a sign that the selling is greater-than-the-buying because prices got two expensive after speculators ran up the market due to worries over a supply disruption caused by Russia’s invasion of Ukraine.

Last week, May WTI crude oil futures settled at $106.30, down $5.81 or -5.18% and June Brent crude oil finished at $109.10, up $5.24 or +4.80%. The United States Oil Fund ETF (USO) closed last week at $76.40, down $3.06 or -3.85%.

Weekly Recap

Crude prices soared last week to their highest levels since 2008 as traders assessed the damage to global supply from Russia’s invasion of Ukraine. Also helping to spike prices higher was the announcement of a U.S. ban on Russian oil and oil products. However, they pulled back sharply throughout the week as some producing countries signaled they may boost supply.

Adding to the market’s volatility was the uncertainty over the U.S. – Iran nuclear deal. Early in the week, traders were convinced the deal would be signed. On Friday, however, supply concerns grew when talks to revive the 2015 deal faced the threat of collapse after a last –minute Russian demand forced world powers to pause negotiations.

Russia Having Trouble Selling Its Oil as Countries, Companies Back Away from Deals

Reuters reported last week that Russia is starting to face problems selling its crude oil and oil products as Western bans and financial sanctions over its invasion of Ukraine begin to bite.

The United States imposed a wide ban on Russian oil and gas imports, while Britain said it would stop buying its oil and oil products by the end of 2022.

Meanwhile, the European Union, which relies on Russia for 40% of the block’s collective gas needs and about 27% of oil imports, is discussing how to phase out the use of Russian fossil fuels.

US Drillers Add Oil and Gas Rigs for Ninth Time in 10 Weeks – Baker Hughes

U.S. energy firms last week added oil and natural gas rigs for the ninth time in 10 weeks after Russia’s invasion of Ukraine drove crude prices to their highest level since 2008.

The oil and gas rig count, an early indicator of future output, rose 13 to 663 in the week to March 11, its highest level since April 2020, energy services firm Baker Hughes Company said in its closely followed report on Friday.

Baker Hughes said that puts the total rig count up 261 rigs, or 65%, over this time last year.

Weekly Forecast

Although last week’s sell-off may have been fueled by thoughts of additional supply, prices could stabilize or become rangebound because the current supply gaps are unlikely to be filled by extra output from members of OPEC and allies, together called OPEC+, given Russia is part of the grouping.

Additionally, some OPEC+ producers, including Angola and Nigeria, have struggled to meet production targets, limiting the group’s ability to offset Russian supply losses.

This week, the focus for traders will be on market reports from the International Energy Administration (IEA) and the Organization of the Petroleum Exporting Countries (OPEC). Both have indicated the market should be oversupplied later this year, but this assessment likely changed after sanctions were placed on Russian crude oil exports.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Buyers Eyeing Retracement to $112.99 – 116.16

U.S. West Texas Intermediate crude oil futures are trading higher at the mid-session on Friday as traders try to avoid posting a potentially bearish closing price reversal top on the weekly chart.

Today’s choppy, two-sided trade is being fueled by headlines around Russia and Iran suggesting more possible supply disruption, versus those that point toward potential remedies to alleviate market tightness.

At 17:41 GMT, May WTI crude oil futures are trading $106.29, up $3.30 or +3.20%. The United States Oil Fund ETF (USO) is at $76.10, up $2.04 or +2.75%.

Helping to underpin crude oil prices is the news that the United States had banned Russian oil purchases earlier in the week. Additional help is being provided by reports that talks to revive the 2015 Iran nuclear deal faced the threat of collapse after a last-minute Russian demand forced world powers to pause negotiations for an undetermined time despite having a largely completed text.

Traders are also dealing with some small headwinds including potential supply additions from Iran, Venezuela and the United Arab Emirates, but there is nothing in the cards to derail the bull market in my opinion.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $126.42 will signal a resumption of the uptrend. A move through $85.81 will change the main trend to down.

The minor trend is also up. A trade through $88.49 will change the minor trend to down and shift momentum to the downside.

The short-term range is $85.81 to $126.42. The market is currently trading inside its retracement zone at $106.12 to $101.32.

The minor range is $126.42 to $99.55. Its retracement zone at $112.99 to $116.16 is the nearest upside target area.

Short-Term Outlook

The short-term direction of the May WTI crude oil market is likely to be determined by trader reaction to $106.12 to $101.32.

Look for an upside bias on a sustained move over $106.12 with $112.99 to $116.16 the first objective.

A downside bias could develop on a sustained move under $101.32. There is also the potential for an acceleration to the downside if $99.55 fails as support.

For a look at all of today’s economic events, check out our economic calendar.

May WTI Reaction to $106.12 – $101.32 Sets Near-Term Course

U.S. West Texas Intermediate crude oil futures are edging higher on Thursday as speculator demand bounced back following yesterday’s steep decline.

On Wednesday, the U.S. benchmark contract posted its biggest daily drop in percentage terms in about two years after the United Arab Emirates (UAE) backtracked on statements saying that OPEC and its allies might increase output to help to plug the gap in exports from Russia.

At 15:04 GMT, May WTI crude oil futures are trading $107.29, up $2.24 or +2.13%. The United States Oil Fund ETF (USO) is at $75.69, up $0.227 or -11.68%.

Today’s price action suggests traders should be prepared for continued volatility with tight global supplies remaining the key issue.

In the U.S., crude inventories fell by 1.9 million barrels in the week to March 4 to 411.6 million barrels. Meanwhile, U.S. crude stocks in the Strategic Petroleum Reserve fell to 577.5 million barrels, the lowest since July 2002.

While most of the fundamentals point toward higher prices, bullish traders are also concerned about a U.S.-Iran nuclear deal and the lifting of sanctions against Venezuela that would lead to more oil hitting the market.

Daily May WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $126.42 will signal a resumption of the uptrend. A move through $85.81 will change the main trend to down.

The minor trend is also up. A trade through $88.49 will change the minor trend to down. This will shift momentum to the downside.

The short-term range is $85.81 to $126.42. Its retracement zone at $106.12 to $101.32 is support.

The minor range is $126.42 to $99.55. Its retracement zone at $112.99 to $116.16 is the nearest upside target and potential resistance.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil market into the close on Thursday is likely to be determined by trader reaction to $106.12.

Bullish Scenario

A sustained move over $106.12 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into $112.99 to $116.16.

Aggressive counter-trend sellers are likely to come in on the first test of $112.99 to $116.16. They are going to try to form a potentially bearish secondary lower top. Trend traders are going to try to drive the market through $116.16 in an effort to challenge the main top at $126.42.

Bearish Scenario

A sustained move under $106.12 will signal the presence of sellers. Their first target is the Fibonacci level at $101.32, followed by yesterday’s low at $99.55.

The daily chart indicates there is plenty of room to the downside under $99.55 with potential targets the minor bottom at $88.49, and the main bottom at $85.81.

For a look at all of today’s economic events, check out our economic calendar.