WTI rallies for the third day, eyeing a close above 2017 high around $112.20

US crude oil benchmark, also known as WTI, rallies 4.67% in the day, aiming to close above the $100 mark for the second day of the year as Wall Street closed, with US equities printing gains. The market sentiment is upbeat, though it would be subject to Ukraine-Russia tussles as it happened in the last two weeks. WTI probes August 2013 $112.21 highs at press time, trading at $111.38 per barrel.

OPEC+ kept the crude oil output unchanged

On Wednesday, the Organization of the Petroleum Exporting Countries and its allies, also known as OPEC+, decided to continue the increase of 400,000 of its crude oil output, as reported by the statement. In the statement, OPEC+ said that current fundamentals and the outlook for the future pointed “to a well-balanced market.” Furthermore, the cartel noted that “volatility” and “geopolitical developments” are to be blamed if demand for the black gold increments.

“Such an argument will increasingly strain credulity,” said analysts quoted by the New York Times.

Market’s reaction

Once the statement crossed wires, Brent crude approached $114.00 a barrel, while WTI hit $112.50, a 10-year high.

Additional factors that would keep oil prices high are sanctions on Russia. Bloomberg reported that “Russia’s flagship Urals crude oil was offered for sale at a record discount but got no bidders, the latest indication that oil trading from the country’s western ports is grinding to a halt.”

Therefore, in the near term, oil traders beware of geopolitical news, while fundamental news would remain in the backseat at the moment.

WTI Price Forecast: Technical Outlook

Western Texas Intermediate (WTI) upward move stalled at August 2017 high at $112.21. However, US crude oil’s steeper rise means that the black-gold would be subject to a mean reversion move, a likely scenario, due to the $15.00 move to YTD highs at $112.50.

If that scenario plays out, WTI’s first support would be March 1 high at 106.75. Breach of the latter would expose the $100 mark, followed by August 2014 swing high at $98.55.

Contrarily, if WTI keeps surging, the first resistance would be $112.50. Once cleared, the next resistance would be June 2011 monthly high at $114.79.