WTI Crude: Stuck In A Bearish Flag
2022.04.24 16:12
While analyzing WTI crude oil futures price action over different time frames, we see a sudden surge that started with Russia’s invasion of Ukraine on Feb. 24, which has finally started to melt down.
No doubt that Russia accounts for approximately 40% of the European oil supply, but the West has been trying to wean itself off Russian energy flows with increasing urgency since Russia began its Ukraine invasion.
Russia’s attempt to disrupt oil supply to “unfriendly” countries, if not paid for in rubles, seemed to be an immediate attack on oil bulls, with Europe saying it amounted to “blackmail” and most Western countries refusing to comply.
On the other hand, the speedy spread of the new variant of COVID-19 had resulted in fresh lockdowns in most parts of China. No doubt that oil inventories could increase amid such a situation, together with decreasing demand for crude oil could hurt oil bulls for a long time.
WTI Crude Oil Futures Monthly Chart
Technically speaking, oil’s monthly chart shows an “Exhaustive” candle forming during March 2022, after testing the second-highest level at $130.47 since the formation of its first lifetime high in July 2008 at $147.18 amid growing recessionary waves at that time.
In April 2022, the WTI could see the possible formation of one more “Exhaustive” candle as the current geopolitical moves could continue to disrupt the demand-supply equation for longer.
WTI Crude Oil Futures Weekly Chart
The weekly chart sees WTI consistently facing bearish pressure since the first week of March 2022 after testing a peak at $130.47. No doubt that the 9 Days Moving Average, currently at $110.28, continues to be an immediate resistance, while the 26 DMA, currently at $96.47, consistently provides some support.
But last week’s closing below 9 DMA looks evident enough to continue price exhaustion during the upcoming weeks.
WTI Crude Oil Futures Daily Chart
WTI’s daily chart shows extreme weakness after the “Bearish” crossover on Mar. 21 when the 9 DMA crossed below the 26 DMA. Also, Friday’s closing price, well at 9 the DMA, indicates a gap-down opening on the first trading session of the upcoming week.
Undoubtedly, WTI could remain volatile during the upcoming week. But, the overall trend looks weak amid the resurgence of the pandemic once again which could keep oil demand on the lower side.
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