WTI Oil Traders Bullish on War, Cautious About Iran Deal

U.S. West Texas Intermediate crude oil futures gapped to a multi-year high on Tuesday after Moscow ordered troops into two breakaway regions in eastern Ukraine, adding to supply concerns that are pushing prices towards $100 a barrel.

Germany put the certification of the Nord Stream 2 gas pipeline from Russia on ice while the United States and European Union discussed potential sanctions as Ukraine reported continued shelling in east Ukraine, Reuters reported.

At 14:31 GMT, April WTI crude oil is trading $93.19, up $2.98 or +3.30%. Earlier in the session, the market hit a high of $94.95. The United States Oil Fund ETF (USO) is trading $66.60, up $1.86 or +2.87%.

Today’s price action in the financial markets indicates traders should prepare for heightened volatility. While crude oil struggles to hold on to its earlier gains, other risky assets like stocks have already produced a wicked two-sided trade. The safe-haven U.S. Dollar, Japanese Yen and Treasury Bonds have also reversed earlier positions.

We’re looking for the strong upside bias to continue because a prolonged war between Russia and the Ukraine could cause supply disruptions, but we are aware that the announcement of a deal between the United States and Iran could drive prices lower.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the intraday high at $94.95 will signal a resumption of the uptrend. A move through $87.46 will change the main trend to down.

The market is also trading on the strong side of a long-term Fibonacci level at $90.74, making it support.

Additional support is a minor pivot at $89.94, followed by a short-term retracement zone at $88.10 to $86.37.

Daily Swing Chart Technical Forecast

The direction of the April WTI crude oil market on Tuesday is likely to be determined by trader reaction to $90.21

Bullish Scenario

A sustained move over $90.21 will indicate the presence of buyers. Taking out $94.95 could trigger an acceleration to the upside with $99.53 the next major target.

Bearish Scenario

A sustained move under $90.21 will signal the presence of sellers. A close under this level will form a potentially bearish closing price reversal top.

Side Notes

If the war escalates in Ukraine then we could see a further breakout over $94.95, but if a U.S. – Iran deal is reached, prices could tumble back to at least $90.74.