- WTI continues to trade choppy and within recent ranges above $100 as traders weigh geopolitics and oil stock releases.
- WTI’s 50 DMA near $100 and 21 DMA above $105 contain price action for now.
world oil markets continued to trade irregularly on Wednesday, with WTI futures of the first month oscillating between lows just above $100 a barrel and highs of $104, meaning price action has remained contained within this week’s levels. It currently trades at $103, the WTI up about $2.0 on the day. Technicals are playing a big role today, with the 50-day moving average just below $100 offering strong support while the 21-DMA just above $105 offers decent resistance.
For now, it appears that market participants are still unwilling to let WTI fall below $100, despite the US authorities’ announcement of a historic crude stockpile release last week and concerns about lockdown extensions in China. This is probably because the geopolitical context remains favourable, with Western nations preparing new sanctions against Russia, whose military is accused of committing widespread war crimes in Ukraine.
The European Commission on Tuesday proposed to ban imports of Russian coal and other raw materials and said it was working on additional sanctions, including imports of Russian oil. Looking ahead, official weekly US crude oil inventory data is released at 15:30 GMT and comes after Tuesday’s private weekly API inventory data showed a surprise build.
But that failed to put a dent in crude prices at the time. Otherwise, traders await more updates on Western sanctions against Russia, on the status of Russia-Ukraine peace talks and on other matters, such as how much oil will be released by member nations of the International Energy Agency ( EIA) along with the US sources told Reuters on Wednesday that the EIA nations have not yet decided how much oil they will release to cool markets. For now, keeping WTI in the $100-$105 range probably makes sense.
Technical levels
Source: Fx Street
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