Crude Oil Price Analysis: Key Resistance Levels in Focus Amid Supply Risks

The crude oil markets seem to be in a bit of stasis at the moment, waiting for some kind of clarity.

WTI Crude Oil

The light sweet crude oil market initially tried to rally during the trading session on Wednesday but gave back gains to show signs of hesitation. Ultimately, we’re sitting above the 50-day EMA, so technical traders may look to that for support.

But let’s be honest, the oil markets right now aren’t really so much about technicals, and they’re a lot more about what the next headlines coming from the Strait of Hormuz, Iran, the United States, and the Strategic Petroleum Reserve are. And really at this point in time, there’s a lot of external noise. It seems like the $85 level is offering a little bit of resistance, but it would only take one incident, and we could see this market just go slicing through it like it isn’t even there.

That’s been the nature of this market since the war started back in March. And although prices really aren’t that much higher than when we started, the price of crude oil has been all over the place, and that just shows how much uncertainty that there is here.

WTI crude oil daily chart shows price holding above the 50-day and 200-day EMAs below the $85 resistance area. Source: TradingView.

Brent

Brent markets look very much the same, using the $92 area or so as resistance. It was previous support. We’re above the 50-day EMA. One would think that there’s probably more risk to the upside than down, but you also have to keep in mind that we could get good news. I’m not necessarily holding my breath for it, but it is a possibility, and that could catch a lot of people offsides.

Brent crude oil daily chart shows price holding above key moving averages below the $92 resistance area. Source: TradingView.

Supply Disruption Will Be a Real Thing

Supply disruption will be a real thing. The question is for how long. That will determine how the markets will behave in both grades of crude. And of course, we have to start to think about the winter and whether or not, by the time we get there, the industrial base in the European Union gets hit.

The United States does produce a lot of its own crude oil, but it’s a specific type, and therefore this could be a very chaotic few months.