WTI rallies on heightened tensions in Ukraine as oil bull’s eye $94.00

On Monday, a session that looked to be of losses for Western Texas Intermediate (WTI) US crude oil benchmark resulted in a positive one courtesy of escalation of Russia/Ukraine tussles. At the time of writing, WTI is trading at $93.92 per barrel.

In the last three hours, tensions in Ukraine get to their peak as Russian President Vladimir Putin recognized Donetsk and Luhansk in Ukraine East as independent states. Furthermore, he ordered a peacekeeping operation in eastern Ukraine, two separatist regions.

That said, WTI’s jumped from the lows 92.00 and reached a daily high at $94.06 before retreating to the $93.90s region. Why oil jump? Russia is the third-largest oil and gas producer in the world. An escalation of the conflict pressures oil prices as uncertainty arises about any oil shortages amid the ongoing worldwide re-opening.

The West answers back

Russian President decision spurred responses from Western Europe and NATO members, led by the US. The President of the European Commission said that the recognition of the two separatist territories in Ukraine is a “blatant violation of international law as well as of the Minsk agreements.” She emphasized that the EU will react with sanctions against those involved in this “illegal act.”

Following those reactions, it was reported that US President Joe Biden spoke with Ukraine President Zelensky. At the same time, Poland’s Prime Minister said that Russia’s decision is an act of aggression on Ukraine and said that sanctions should be imposed immediately. Meanwhile, in the UK, Foreign Minister Truss said that the UK would be announcing sanctions on Russia tomorrow in response.

WTI Price Forecast: Technical outlook

From a technical perspective, WTI has an upward bias, as shown by the daily moving averages (DMAs) located above the price. Furthermore, from a market structure perspective, WTI stays trading in the $92.00-$94.00 area, close to the YTD high and the confluence of the 75% Pitchfork’s parallel line around $95.79.

However, on its way to the latter, WTI’s bulls will face some resistance levels on their way north. The first resistance would be $94.00. Breach of the latter would open the door towards February 16 high at $94.98, immediately followed by the YTD high at $95.79. Once cleared, WTI bulls would probe August 2014 highs at $98.55.