WTI Oil Expected to Open Higher with $93.83 Next Target

U.S. West Texas Intermediate crude oil futures rose on Monday over the stand-off between Russia and the West over Ukraine, adding to supply concerns that have kept oil prices near $100 a barrel. Volume was on the light side because of a U.S. bank holiday, which could have contributed to the one-sided trade.

On Monday, April WTI crude oil futures settled at $92.83, up $2.62 or +2.90%. On Friday, the United States Oil Fund ETF (USO) settled at $64.75, up $0.58 or +0.90%.

French President Emmanuel Macron said early Monday that U.S. President Joe Biden and Russian President Vladimir Putin had agreed in principle to a summit over Ukraine, but the Kremlin said there were no immediate plans.

Additionally, the Kremlin announced Putin would sign a decree recognizing two breakaway regions in eastern Ukraine as independent. The European Union warned it would consider sanctions if the regions are recognized as independent.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through $93.83 will reaffirm the uptrend. A move through $84.92 will change the main trend to down.

The minor trend is down, but momentum is edging higher following the confirmation of Friday’s closing price reversal bottom.

On Monday, the April WTI crude oil market closed on the strong side of a long-term Fibonacci level at $90.74, making it support. This is followed by a minor pivot at $89.38.

The retracement zone at $87.45 to $85.94 is controlling the near-term direction of the market.

Short-Term Outlook

A sustained move over $90.74 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for the rally to possibly extend into the main top at $93.83. This is a potential trigger point for an acceleration to the upside with the June 2014 main top at $99.53, the next major target.

A failure to hold $90.74 will signal the presence of sellers. This could lead to a labored break with potential support targets lined up at $89.38, and $87.45 – $85.94.