WTI Prices Recover Above $72

WTI crude oil has rebounded to the $72.50 zone over the past four trading sessions, primarily after a recent drone attack by Ukrainian forces that damaged a key pipeline in southern Russia. The estimated damage could reduce oil exports from this region by up to 30% for at least two months. This new unexpected supply disruption has supported short-term demand for crude oil.

Additionally, ongoing trade war concerns have boosted demand for crude as an inflation hedge, reinforcing short-term bullish sentiment.

The Range Remains Stable

For now, WTI continues to trade within a well-defined range between:
$78 resistance (upper boundary)
$66 support (lower boundary)

Currently, the price is hovering near the middle of this neutral range, showing no clear directional trend. As long as price movements remain within this area, a clear breakout may take time to develop.

Neutrality Prevails:

• RSI Indicator:
  The RSI line maintains an upward slope, but price action remains neutral around the 50 level, the indicator’s equilibrium point.
  This suggests a balance between buyers and sellers over the past 14 periods.
  
  
• TRIX Indicator:
  The TRIX line is currently reaching the 0 neutral level, reinforcing that the exponential moving average momentum remains neutral.
  
  Both indicators confirm that the market remains in a consolidation phase, requiring stronger movements to establish a clearer trend.
  
  

Key Levels to Watch:

• $78 – Major Resistance: Upper boundary of the current range. A breakout to this level could revive bullish momentum, similar to the buying pressure seen in early December.
  
  
• $66 – Key Support: Lower boundary of the sideways channel. A drop near this level could strengthen bearish sentiment, reinforcing the downward trend observed in January.
  
  
• $72 – Current Resistance & Critical Level: Midpoint of the neutral range that aligns with 50% Fibonacci retracement along with 50 & 100-period simple moving averages. This strengthens its importance as a key level.
  
  If price continues oscillating around this zone, the sideways range could persist in the coming sessions.
  
  

By Julian Pineda, CFA – Market Analyst