April WTI Could Face Early Resistance at $107.66 – $110.17

U.S. West Texas Intermediate crude oil futures are testing their high late in the session as Russia’s invasion of Ukraine escalated and Western sanctions disrupted air and sea transport, threatening flows of raw materials.

Crude oil hit its highest price in more than seven years, gas prices rocketed 24% and wheat hit its highest in nearly 14 years on fears that logistics problems will result in shortages.

At 21:56 GMT, April WTI crude oil is trading $106.21, up $10.49 or +10.96%. Also on Tuesday, the United States Oil Fund ETF (USO) closed at $71.83, up $4.35 or +6.45%.

The market rose despite the announcement of the release of 60 million barrels of crude oil from various countries’ strategic petroleum reserves. The United States has agreed to release 30 million barrels of crude oil from its SPR. The rest of the IEA members in Europe and Asia will release the remaining 30 million barrels.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at $106.78 will signal a resumption. A move through $87.46 will change the main trend to down.

The minor trend is also up. A trade through $90.06 will change the trend to down. This will also shift momentum to the downside.

The minor range is $90.06 to $106.78. Its 50% level at $98.42 is the nearest support.

The short-term range is $87.46 to $106.78. Its retracement zone at $97.12 to $94.84 is additional support.

Short-Term Outlook

Taking out $106.78 early Wednesday will signal a resumption of the uptrend, but the market could run into multi-year resistance at $107.66, $108.73 and $110.17. The latter, however, is a potential trigger point for an acceleration to the upside with $114.09 the next major target.

We’re not worried about a change in trend, but we are looking for heightened volatility especially with the best support area nestled at $98.42 – $97.12.

Traders should also note that high prices mean bigger moves in terms of dollars so be prepared for greater risks.