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Crude Oil Prices Challenge Key Range Top. Breakout Ahead?

Crude Oil Prices Challenge Key Range Top. Breakout Ahead?

Ilya Spivak, Head Strategist, APAC

CRUDE OIL TECHNICAL OUTLOOK: NEUTRAL

  • Crude oil prices locked in choppy range after early-2022 Ukraine war spike
  • Breaching range top resistance may expose the yearly high above $130/bbl
  • Near-term support just above $101/bbl, downside extension may be difficult

Crude oil prices have been locked in a choppy consolidation range for much of the year. The WTI contract spiked to test above the $130/bbl figure amid supply disruption fears as Russia invaded Ukraine, and then pulled back to settle for aimless oscillation in a wide $92.93-116.64 trading band.

Prices have now edged upward to challenge range resistance. A break above that secured on a daily closing basis may set the stage for extension higher, toward the year’s high at $130.50. The record high just above $147/bbl set in mid-2008 is not far behind that if the 2022 swing top is cleared.

WTI crude oil (daily chart)

Crude oil daily chart

Chart crated with TradingView

The bounds of the near-term upswing within the range from mid-April lows seem to rest just above the $101/bbl mark. A downturn from here that takes prices through this that figure is likely to neutralize immediate upward pressure and set the stage for a test of the range floor.

From there, confirmation of a breach – again, on a daily close – may open the door for a slide below the $90/bbl handle to revisit resistance-turned-support at $84.65. The dense congestion zone between where prices currently sit and these levels warns that progress in this direction may be slow and struggling for lasting follow-through.

CRUDE OIL TRADING RESOURCES

--- Written by Ilya Spivak, Head Strategist, APAC for DailyFX

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

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

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