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Oil Breaks Out to Fresh Highs as Commodities Remain Bid

Oil Breaks Out to Fresh Highs as Commodities Remain Bid

Tammy Da Costa, Analyst

Oil, WTI (US Crude), Brent Crude Talking Points:

  • Oil remains supported as Russia pursues war on Ukraine
  • Sanctions against Russia drive Oil prices higher
  • Inflation outlook remains a key concern for central banks including the ECB and the Federal Reserve (Fed)

Russia, Ukraine and Oil – Can Oil Maintain its Bullish Trajectory?

The causalities of the war between Russia and Ukraine have proven to go well beyond the borders of Eastern Europe as fears spill over to markets.

As the war continues to dominate risk sentiment, sanctions against Russia and the retaliation from both EU and Western leaders through stricter sanctions have placed oil and gas at the forefront of inflationary pressures as consumers struggle to recover from the Coronavirus pandemic.

Although the conflict is yet to be resolved, supply constraints and further disruptions to the production of both oil and gas will likely continue to support energy prices and other commodities (including metals and wheat) for the foreseeable future.

Oil Technical Analysis

With prices currently testing the key psychological level of $100 mark both Brent Crude and WTI (US Crude) currently remain above the rising channel with the CCI (commodity channel index) climbing back into overbought territory. However, given the current global fundamental backdrop, the bullish trajectory is likely to continue, at least for now.

Brent Crude Oil Daily Chart

Oil Breaks Out to Fresh Highs as Commodities Remain Bid

Chart prepared by Tammy Da Costa using TradingView

With Europe largely reliant on Russia for both gas and oil, Brent may continue towards the $120.00 handle with WTI on it’s way to test the June 2014 high at around the key psychological level of $108.00

US Crude Oil (WTI) Daily Chart

Oil Breaks Out to Fresh Highs as Commodities Remain Bid

Chart prepared by Tammy Da Costa using TradingView

--- Written by Tammy Da Costa, Market Writer for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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