The crude oil price has resumed its upward trajectory, as crude oil options continue to experience demand not seen in nearly a decade. Data from exchanges show that prices in the futures markets are rising to almost 14-year highs, as Western sanctions severely impact Russia’s ability to meet its export quota. Russia is second behind Saudi Arabia in crude oil exports, accounting for 8% of the global oil market.
Crude oil latest news
ANZ Bank says that Russia’s export capacity has dropped by 1 million barrels, with buyers also shying away from the 5 million barrels coming from the Russians into the market daily. Supply constraints are also expected to persist in the short term as Libyan supply remains unstable. Several OPEC members are also not fulfilling their quotas.
Even with the Iran nuclear deal close to being signed, oil from Iran is not expected to be a short-term price determinant as it will take months for it to come into the market. Escalation of the Russia-Ukraine war and more sanctions could only mean that crude oil price on the WTI and Brent benchmarks could continue toward 15-year highs.
Crude Oil Price Outlook
The recent jump to the 119.78 price mark (1 August 2011/7 May 2012 highs) was followed by a brief correction below 116.26 (9 September 2013/9 June 2014 highs). This correction extended to 109.58 before a bounce restored the uptrend move, with 116.26 as the immediate upside target. A break above this level brings 119.78 into focus once more. If there is an advance move above this level, 126.42 (9 May 2011/26 March 2012 highs) becomes the new upside target.
On the flip side, a drop below 109.58 continues the correction, with 106.11 and the psychological price level at 100.19 serving as additional upside targets. 96.58 and 91.32 only become viable if the correction extends further south.