- WTI hit highs for the week above $87.00 on Wednesday amid a risk appetite recovery and ongoing geopolitical concerns.
- Ahead, oil traders will be watching official US inventories, the Fed policy meeting, OPEC+ headlines and further geopolitical updates.
Front-month WTI futures hit fresh highs for the week above the $87.00 level on Wednesday, as a broad risk appetite recovery combined with ongoing geopolitical and OPEC+ supply concerns underpinned the price action. WTI is now nearly $4.50 or over 5.0% higher versus Monday’s lows near $82.00 per barrel and earlier in the session when prices surpassed the $87.00 mark, was only a whisker below last week’s multi-year highs at $87.90 per barrel. At current levels in the mid-$86.00s, WTI is trading higher by slightly more than $1.0 on the day.
“Anxiety over potential supply disruptions in the Middle East and Russia is providing bullish fodder for the oil market” said an analyst. “The market downside is limited due to heightened tensions between Russia and Ukraine and the threat to infrastructure in the UAE,” said another. To give context, tensions in Eastern Europe have escalated this week as Russia continues to amass troops near the Ukrainian border and as NATO has moved to beef up its Eastern European military presence. Some countries (like the UK) have been providing arms to Ukraine and most NATO/EU nations are threatening harsh economic sanctions should Russia invade Ukraine.
Some oil strategists have suggested that in a worst-case scenario where Russia did invade and Western powers took steps to sever the Russian economy off from the global market, sanctions on Russia energy exports could send oil prices well beyond the $100 per barrel mark. Meanwhile, tensions between the Saudi-led (sunni) coalition and regional Iran-backed (shia) militia groups have amped up over the past few weeks, with the Iran-backed Houthis in Yemen recently upping attacks on oil infrastructure in the UAE. Geopolitics is set to remain a key driver or oil prices in the days ahead, though oil traders would do well to watch how broad risk appetite is impacted by the Wednesday Fed policy announcement for any follow-through to oil prices.
OPEC+ headlines are also worth keeping an eye on, with the latest sources suggesting (as expected) that the cartel will stick to its plans to up production by another 400K barrels per day in March. The bigger theme for oil markets right now is whether smaller OPEC+ producers can actually keep up with these output hikes, which has not been the case in recent months. Oil traders should also keep an eye on the latest official weekly US EIA crude oil inventory figures out at 1530GMT. The weekly private API inventory report showed a slightly larger than expected draw of 0.9M barrels.
WTI US Oil
|Today last price||86.18|
|Today Daily Change||1.07|
|Today Daily Change %||1.26|
|Today daily open||85.11|
|Previous Daily High||85.39|
|Previous Daily Low||82.76|
|Previous Weekly High||86.93|
|Previous Weekly Low||82.64|
|Previous Monthly High||77.26|
|Previous Monthly Low||62.34|
|Daily Fibonacci 38.2%||84.38|
|Daily Fibonacci 61.8%||83.76|
|Daily Pivot Point S1||83.45|
|Daily Pivot Point S2||81.79|
|Daily Pivot Point S3||80.82|
|Daily Pivot Point R1||86.07|
|Daily Pivot Point R2||87.04|
|Daily Pivot Point R3||88.7|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.