It’s been a choppy, mixed day for global oil markets as traders juggle a multitude of fast-developing themes and attempt to assess the outlook for the all-important global supply/demand balance in the coming months. Front-month WTI futures have found solid demand in the $108.00 area, which has provided a floor to the price action on the day thus far, while an earlier rally towards $115 was sold. At current levels in the $109.00s per barrel, WTI is broadly flat on the day, with technicians eyeing resistance in the $115-$116 area and significant support around $104 and $100.

In addition to the sustained close below the 10-day EMA, an impending bear cross of the MACD line and the signal line also favor sellers.

However, a clear downside break of the 21-day EMA level of $101.40 becomes necessary to convince the oil bears.

Even so, an upward sloping trend line from December 20, 2021, joins 50% Fibonacci retracement of December-March upside to restrict the quote’s downside around $94.50. Also acting as a downside filter is the $100.00 threshold.

On the flip side, a daily close beyond the 10-day EMA, around 106.45 by the press time, will direct the WTI crude oil buyers towards the 23.6% Fibonacci retracement level surrounding $111.40.

Following that, the $120.00 round figure and the latest multi-month high around $126.50 will lure the commodity bulls.

Overall, WTI crude oil is expected to decline further but the bullish trend is here to stay.

Unless supply concerns show some real signs of easing, dips towards $100 will remain attractive. But as long as hope remains for some sort of Russo-Ukraine ceasefire and increased output from major producers, rallies back towards $120 may be difficult to sustain.

Mixed Sentiments on Crude Below $110 and Above $100

Mar 11 2022