Crude Oil Highs Get Lower, As WTI Reverses Down
US WTI crude oil has reversed down today. losing nearly 10% of the value despite France pushing for EU sanctions on Russian oil
Crude Oil has been bullish since US WTI crude reversed from $-37.50 two years ago. It headed toward $100 where it traded for some time, but the conflict in Ukraine last month sent it surging higher, especially when the US president Joe Biden decided to place sanctions on Russian oil. WTI crude surged close to $130 but it reversed back down, just as quick.
The price fell below $94, where it has formed a support zone but we saw a bounce off the 50 SMA (yellow) on the daily chart in another attempt to resume the uptrend. But, that attempt failed and finished off above $116 as oil reversed back down.
WTI Crude Oil Daily Chart – US Oil Facing the 50 SMA
This time the 50 SMA was broken but the support zone held again and last week we saw a strong bullish move which took the price to $110. Although, after yesterday’s doji candlestick which is a bearish reversing signal, today we are seeing a strong bearish day s WTI heads toward $100. So, the highs keep getting lower for oil, which means that buyers are getting weaker.
The OPEC+ compliance increased to 157% in March, up from 132% in February but that was expected, given the situation with Russia, as they underproduce by 313k bpd in March amid ongoing sanctions. OPEC+ produced 1.45 million barrels/day below target last month as Russian output was hit by sanctions. The widening supply gap will be something to watch, as that will offset against slowing demand considering that the global economy is set to face a slowdown as inflation grips.
Remarks by French Finance Minister, Bruno Le Maire
- An embargo on Russian oil is in the works
- We want an embargo on Russian oil
- Hopes in the coming weeks can convince European partners to stop importing Russian oil
Well, Germany remains the big stumbling block and it remains to be seen how European lawmakers can work around that to pursue this option. For now, it’s all talk but we have to see how that translates into action in the months ahead.
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