Friday’s gains in prices of the WTI was on the back of short covering, as noted by shrinking open interest and volume. Against that, crude oil prices could slip back to the $100.00 zone (February 24 highs) in the short-term horizon ahead of the monthly low in the proximity of $95.00 (March 1). 

Weekend news confirmed upbeat developments on the Moscow-Kyiv talks following the positive updates from negotiations between Russia and Ukraine by Russian President Vladimir Putin on Friday. Also positive were updates from Bloomberg saying, “Diplomats from the US and China will meet for the first time in person since the Ukraine-Russia crisis began on Monday.”

Although 10-DMA restricts the black gold’s immediate upside, around $109.90 by the press time, an upward sloping support line from December 20, 2021, near $95.50, becomes the key level to watch during the quote’s further weakness.

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.

Temporary Bearish Weakness Expected on Crude

Mar 14 2022