May WTI Oil: Next Major Target Zone is $109.31 – $113.35

U.S. West Texas Intermediate crude oil futures are trading sharply higher on Monday on reports European Union nations were considering joining the United States in a Russian oil embargo and after a weekend attack on Saudi oil facilities.

Expectations of a further escalation of the war is also helping to drive prices higher after Ukraine’s deputy prime minister Jryna Vershchuk, early Monday said there was no chance the country’s forces would surrender in the besieged eastern port city of Mariupol.

At 10:36 GMT, May WTI crude oil futures are trading $107.38, up $4.29 or 4.16%. On Friday, the United States Oil Fund ETF (USO) settled at $74.69, up $1.01 or +1.36%.

In other news, the latest report from the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+, showed some producers are still falling short of their agreed supply quotas.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $92.20 will change the main trend to down. A move through $126.42 will signal a resumption of the uptrend.

The main range is $61.86 to $126.42. Its retracement zone at $94.14 to $86.52 is support. This zone stopped the selling at $92.20 on March 15.

The short-term range is $85.81 to $126.42. The market is currently trading on the strong side of its retracement zone at $106.12 to 101.32, making it support.

The minor range is $126.42 to $92.20. Its retracement zone at $109.31 to $113.35 is the next upside target.

Daily Swing Chart Technical Forecast

The direction of the May WTI crude oil market on Monday is likely to be determined by trader reaction to the 50% level at $106.12.

Bullish Scenario

A sustained move over $106.12 will indicate the presence of buyers. The first upside target is the minor 50% level at $109.31. Overtaking it will indicate the buying is getting stronger with the Fibonacci level at $113.35 the next likely target. This is a potential trigger point for an acceleration to the upside with $126.42 the next major target.

Bearish Scenario

A sustained move under $106.12 will signal the presence of sellers. The first downside target is the short-term Fibonacci level at $101.32. This is a potential trigger point for an acceleration to the downside with the next target the major 50% level at $94.14, followed by the main bottom at $92.20.

Side Notes

Trader reaction to the retracement zone at $109.31 to $113.35 will determine the near-term direction of the May WTI futures contract.

Bullish trend traders are going to try to trigger a breakout over $113.35 in an effort to retest the main top at $126.42. Bearish counter-trend traders are going to try to form a potentially bearish secondary lower top. Their main objective is to turn the main trend down.