WTI oil is consolidating around the $92.00 level after moving as high as $96.00 earlier this week as tensions on the Ukraine border continue to cause wild volatility for commodity prices.
So far, WTI oil has failed to react to the latest reports that there are of mortars and grenades being fired by Ukrainian forces in the LPR region. LPR is Luhansk People’s Republic, located in Luhansk Oblast in the Donbas region.
Shooting in LPR regions is not unusual, but in this current environment oil markets are ultra-sensitive. If this something even more ominous as it may be the cover needed for military action by Russian forces.
It should be noted that commodity prices are also being affected by FED speak. FED policymakers’ hesitance to back the 0.50% rate-hike for March could also be behind the rally in oil price stalking.
Traders are mindful that oil prices could soon be above $100.00, which could further turbo charge the March inflation report, and cause the FED to take more dramatic policy action.
For the record, today’s Fed’s speak and second-tier data from the United States will be important to watch. Also important is technical divergence, which threatens to unravel the current rally.
According to the ActivTrader market sentiment tool just 28 percent of traders are bullish towards crude oil, leaving plenty of scope for a further upside, as retail traders appear to be on the wrong end of the recent move.
WTI Oil short-term Technical Analysis
The lower time frames currently show that WTI oil is in a strong bullish trend, with WTI trading nearly $25.00 away from the lows of 2022, which is a significant price move to the upside.
Bearish MACD price divergence has formed, and is present down towards the $70.00 level, which eventually leaves plenty of scope for a massive correction to the downside at some stage.
WTI Oil medium-term Technical Analysis
The daily time frame shows that WTI oil has formed a massive broadening expanding wedge pattern, with the pattern holding an upside projection of some $35.00
Should we see the bulls falling to move the price above the top of the pattern, around $95.50, then we could see a big reversal. A breakout to the upside could cause an unthinkable breakout.