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West Texas Intermediate (WTI), the US crude oil benchmark edged higher as an escalation in the Russia-Ukraine conflict raises the fear of crude supply disruption.
Following Ukraine’s launch of US and UK-supplied missiles into Russian territory this week, concerns over a possible escalation of the Russia-Ukraine war fueled the price of WTI. Russian President Vladimir Putin declared Thursday that a ballistic missile strike against a Ukrainian military installation had been launched.
Meanwhile, with Russia’s Gazprombank crucial to the energy markets, the US sanctioned the bank, eliminating an opening Washington had maintained during the conflict. Some of the remaining Russian gas supplies to some countries in central Europe could be cut off as a result of the sanctions.
Amid rumors that output hikes may once more be delayed, commodity traders are keeping an eye on the OPEC+ meeting scheduled for December 1. Slowing global demand has lately caused the producer group to postpone its 2024 and 2025 output hikes, which were initially scheduled to begin in October of last year.
This comes as China, a top importer, continues to struggle with weak economic growth and low demand.
Crude oil stockpiles in the United States for the week ending November 15 increased by 545k barrels, compared to a rise of 2.089 million barrels in the previous week. The market consensus estimated that stocks would increase by 400k million barrels.
Technical Analysis
Source: TradingView
US Crude Oil is trading in a strong rally after breaching resistance at 69.6. This came after price attempted to breach resistance twice and formed new highs above it. The price then moved above the 100 EMA, another indicator of bullish momentum.
If buyers maintain momentum and drive the formation of new highs, traders will be watching the zone around $72 very closely.
In a bearish scenario where price fails to sustain its gains, it could drop below the former resistance level, now acting as support. Further price movement will depend on market dynamics.
