Crude Oil Price Update – Traders Waiting for Catalyst to Extend Uptrend

U.S. West Texas Intermediate crude oil futures are inching higher on Friday, putting it in a position to finish nearly unchanged for the week, as a planned European Union ban on Russian oil balanced demand concerns over slowing global economic growth.

At 13:17 GMT, July WTI crude oil is trading $109.58, down $0.31 or -0.28%. On Thursday, the United States Oil Fund ETF (USO) settled at $80.58, up $1.29 or +1.63%.

The price action this week suggests a stalemate between bullish traders hoping a European Union embargo of Russian crude oil would tighten supply and bearish traders worried that higher interest rates would choke economic growth and consequently, crude oil demand.

Russian Oil Embargo Negotiations Stall

EU foreign ministers failed earlier in the week in their effort to pressure Hungary to lift its veto of a proposed oil embargo on Russia, with Lithuania saying the bloc was being “held hostage by one member state”, Reuters reported.

The ban on crude imports proposed by the European Commission in early May would be its harshest sanction yet in response to Moscow’s Feb. 24 invasion of Ukraine and includes carve-outs for EU states most dependent on Russian oil, Reuters added.

IMF Urges Asia to be Mindful of Spillover Risks from Tightening

Asian economies must be mindful of spillover risks as a decade of unconventional easing policies by major central banks is unwound faster than expected, International Monetary Fund (IMF) Deputy Managing Director Kenji Okamura said.

The risks applied particularly to the most vulnerable economies, said Okamura.

Asian economies faced a choice between supporting growth with more stimulus and withdrawing it to stabilize debt and inflation, he said.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on May 17.

A trade through $113.20 will negate the chart pattern and signal a resumption of the main trend. A move through $96.93 will change the main trend to down.

The minor trend is also up. A trade through $103.24 will change the minor trend to down. This will confirm the shift in momentum.

The minor range is $113.20 to $103.24. Its 50% level or pivot at $108.22 is support.

The short-term range is $116.43 to $88.53. Its retracement zone at $105.77 to $102.48 is support. This area is controlling the near-term direction of the market.

Daily Swing Chart Technical Forecast

Trader reaction to $108.22 will determine the direction of the July WTI crude oil market on Friday.

Bullish Scenario

A sustained move over $108.22 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the main top at $113.20. Taking out this level could trigger a late session surge into the March 7 main top at $116.43.

Bearish Scenario

A sustained move under $108.22 will signal the presence of sellers. This could trigger a break into a Fibonacci level at $105.77, followed by the minor bottom at $103.24 and a 50% level at $102.48.