The West Texas Intermediate Crude Oil market has rallied a bit on Wednesday to break above the top of the candlestick from Tuesday. If you remember, the Tuesday candlestick was what I referred to as a potential “binary trade”, meaning that if we can break above it, the market could go higher. After all, the neutral candlestick suggests that we are in the midst of trying to figure out whether or not momentum will pick up.
Now that we have broken decisively to the upside, the market looks very likely to continue going higher, perhaps reaching towards the $120 level. Given enough time, we could go all the way to the $130 level yet again. The market has been very bullish, but I do not want to see some type of parabolic move, because as you can see, we had recently had one of those, which of course fell apart quite drastically. There is only a certain amount of momentum that can come into a market without it falling apart, so the sustainability of the uptrend is what I am looking for.
Looking at the chart, the 50-day EMA is sitting at the $96.55 level and climbing. As long as we can stay above this indicator, it does suggest that we are still in an uptrend. The size of the candlestick is rather impressive, so I think we will continue to see buyers on every short-term dip. The market has been very noisy but has also been decidedly positive. I have no scenario in which I am willing to short the oil market anytime soon, so looking at dips as potential buying opportunities will continue to be the way to approach the market. That being said, we will eventually run into “demand destruction”, but I do not think we are anywhere near that right now.
Ultimately, this is a market that I think has quite a bit of upward mobility to it, especially as the war in Ukraine rages on. The lack of Russian oil on the open market is going to continue to cause issues, but inflation itself is reason enough to think that oil should continue to go higher. Regardless, this is a market that continues to offer plenty of opportunities for those willing to be patient enough to find value.
Russian Foreign Minister Sergei Lavrov said the US gave written guarantees that Western sanctions against the country will not impact future trade with Iran, CNBC reported on 18 March.
After hovering lower for two weeks, Brent briefly returned to above 120/BBL on 25 March on reports that Yemen’s Houthi rebels – backed by Iran – launched fresh attacks on Saudia Arabia. The attack hit Saudi Aramco’s oil depot in Jeddah and other facilities in Riyadh. WTI also rose to above 114/BBL on the day.
The man who predicted crude oil $120 in 2020 when crude was at $30 alltime low The EIA raised the trading price of Crude oil by $22 per barrel to an average of $105.22 per barrel in its March Short-Term Energy Outlook (STEO), and the American benchmark West Texas Intermediate (WTI) to $101.17 per barrel. The higher price projection includes concerns about supply disruptions and additional sanctions as a result of Russia’s continued invasion of Ukraine.
Brent is expected to fall to $88.98 per barrel post-2022, whereas WTI will fall to $84.98 per barrel. The EIA emphasized, however, that the price projection is ‘very unpredictable’, as actual price outcomes will be determined by the severity of Russia’s sanctions, any new potential sanctions, and the impact of individual business actions.
In 2020, during the COVID outbreak, the event suddenly draws Crude & Brent oil prices. The crude oil (WTI) starts falling from 65/barrel to 19/barrel.
The continuous fall frightens investors all over the globe. But, Ankit, Wealth Manager (USA), who is also an entrepreneur & investor at that time publicly said on his YouTube video that crude will touch($90-$100) soon due to macroeconomic conditions which central banks created by putting interest rates at an all-time low.
Ankit said in 2020, due to this petrol prices will touch Rs.100 first time in India. In 2022, he seems indeed right. Today petrol prices all over India almost hit Rs.100 due to an international price hike in Brent oil.
Today also his video is still available on his YouTube platform which he created by the name of ‘Market Maestroo’.
This video he released on Dec.25 2020. One can check it as a fact as well. He is one of the only Wealth Managers in the Globe who predicted a rise in Crude oil & only economist in India who predicted Rs100/litre of petrol.
Apart from this, his many predictions in recent times come true which also become the centre of attraction for many investors. He also predicted inflation is coming & USA inflation may touch 10%. Today Feb 2022, USA inflation is sitting at 30 year high of 8%.
After such successful predictions, Ankit, Wealth Manager (USA), now started gaining popularity & limelight. One of his famous quote in investing is “Investing is done with a calm mind, not to calm your mind WTI oil outlook: Oil hits $130 per barrel on fears that Russian energy products WTI bulls move in as US and EU move towards sanctioning Russia further. US Strategic Petroleum Reserve (SPR) does little to cool down supply concerns. West Texas Intermediate (WTI) crude oil rose on Monday on persisting supply concerns as Russian energy sanctions are very much on the table following the Russian forces' civilian killings in north Ukraine. For a fresh high of the day, at $103.82. WTI spot is up by some 4.5% as White House's National Security Advisor, Jake Sullivan, announced that the US is working with European allies to coordinate further sanctions on Russia.
Sullivan said that they have concluded Russia has committed war crimes, Bucha offers further evidence to support that, pointing to a protracted war. '' Ukraine-Russia conflict may not be just a few more weeks, could be months.''
Ukraine’s top prosecutor has said 410 bodies had been found in towns recaptured from retreating Russian forces around Kyiv as part of an investigation into possible war crimes. The weekend media reported mass killings of civilians in the town of Bucha which had been under Russian occupation until recently.
The reports led to an array of calls from within the European Union for the bloc to go further in punishing Moscow. Consequently, a fifth package of sanctions against Russia is being arranged with the new round of measures expected to be approved later this week.
Meanwhile and despite the release of 180-million barrels from the US Strategic Petroleum Reserve (SPR) and an agreement last week from members of the International Energy Agency (IEA) to release some of their own strategic reserves, oil is firmer due to the persistence of geopolitical concerns.
"The global oil market remains in deep deficit of likely 1.5 mb/d over the last 4 weeks, before the loss of Russian supply even started, with global inventories at their lowest levels in recent history on a demand-adjusted basis and with limited OPEC and shale elasticity in months to come. Demand destruction requires higher prices, yet this dynamic is being nullified by increased government interventions in cutting gasoline taxes," Goldman Sachs said in a report.
''Indeed, while the SPR release can quell near-term tightness concerns, it does not solve the longer-term issues in the crude market. Structural deficit conditions could still persist down the road as these reserves will need to be replenished at a time when global spare capacity and inventory levels will still be stretched,'' analysts at TD Securities explained.
''In this sense, the right tail in energy markets is set to remain structurally fat as depleted reserves would add to the existing risks of self-sanctioning, stretched spare capacity across OPEC+, constrained shale production, an uncertain Iran deal and OECD inventories at their lowest since the Arab Spring. We expect this vast array of supply risks to remain the driving force in the energy market.''