2022/04/18 (027) Technical Analysis – UKOIL

Stabilization more or less around the USD 100 price area
Oil prices caught between Ukraine worries and rising supply


Brent and WTI oil prices are currently fluctuating between concerns about Ukraine and China on the one hand and rising inventories on the other. Prices have recently been able to recover rapidly from the lows on Monday, with the US variety WTI even climbing well above the USD 100 mark again. The development comes as a bit of a surprise given the falling demand from China due to the lockdown and the recently increased inventories. However, there are also a number of factors that support the rise in oil prices.

In the last few days, WTI and Brent oil have received a boost from the slight easing in the mega-metropolis of Shanghai, which is currently in a hard lockdown.China’s slowing demand due to far-reaching lockdown measures had previously depressed oil prices. The Middle Kingdom is one of the largest oil-demanding countries in the world. However, lowered demand forecasts from OPEC on Tuesday and the International Energy Agency (IEA) on Wednesday did not impact prices. It argued that global demand for oil is likely to be lower this year due to the Ukraine war and China’s zero-Covid policy.

Our Trading Capability Thus Took Off Faster Than Excepted

On Tuesday, the 15th February, in the 3rd Edition, of our DEVISE 2 DAY Affiliate Financial Market Online Newsletter, i formulated a trading capability in the UKOIL – incl. with an entry price (93 USD), target price (130 USD) and or stop price (84 USD). In this case, UKOIL reached our target price. Everything i wrote was and or everything i`m still writing is no an investment recommendations. But, in the truest sense of the word, a trading capability for self-deciders. All my readers decide for themselves whether to trade something or not – regardless of my opinion. Because my DEVISE 2 DAY Affiliate Financial Market Online Newsletter is 100% commercially with 100% the best of my knowledge and beliefs. I always encouraging you to get better informed – to stay even 100% informative. So that you can better decide for yourself (not) act – buy/sell whatever you want.

Oil prices caught between Ukraine worries and rising supply

On the other hand, there are still concerns that the European Union could impose an embargo on Russian crude oil. However, the EU foreign ministers were unable to agree on this last Monday. However, a possible embargo is not yet off the table, which is why the risk is hanging over the oil market like the sword of Damocles and is supporting prices. Oil prices are benefiting from the current uncertainty. A further escalation in the Ukraine war could lead to new sanctions at any time.

Despite the Ukraine crisis, the market seems to be better supplied than feared, argued Commerzbank’s oil expert. This is also shown by the latest crude oil inventories. These have recently increased significantly. Inventories rose by 9.4 million barrels (159 liters) to 421.8 million barrels compared to the previous week. However, the increased inventories only had a temporary impact on oil prices. According to the IEA, demand is mostly in balance, which is also due to the release of national oil reserves.

Stabilization at the USD 100 mark

Oil prices are currently on the up again. The WTI variety was able to recover from another fall to the local lows of mid-March at USD 91.71. The leap over the USD 100 mark was successful. The dynamic upward impulse has now reached the first significant resistance. A backlash occurred at the recent local highs around $104.00. As long as the oil price trades below this, the short-term downtrend remains active. Only a breakout above the highs could unleash further potential to USD 107.82 and higher.A retracement is likely to occur first at the resistance at USD 104.00. The RSI on the H4 chart has already reached the overbought territory. The overbought status should be reduced first. This goes beyond price or time. Either there is a setback or the price moves sideways in a range. An interesting retracement level is at the 50-day moving average at $99.50. This is also where the 38.2% retracement level of the recent bullish impulse lies. From there, the impulse could fan out further north. Below the average line, on the other hand, the situation deteriorates. Then there could be a retracement to 97.00 or the 92.70 lows.

Use The Psychologically Important Price Action Area At 100 USD As A Trading Capability

Even though I formulated our current possibility at $112. I think it’s more profitable for traders and investors to go long than short. For now, I’m basically neutral on prices below $100. Because I then assume that the Urkaine conflict has been priced out for the time being. Although no financial market participant can quantify that 100 percent correctly. But looking back, the breakout to over USD 100 happened shortly before the outbreak of war, in February. So that we can assume, if we want to, that the rising oil price is mainly due to the fiscal policy of the left-liberal states in our so-called West. And on their verbal-political green agenda, which sends us taxpayers and consumers back to a green Soviet Union, green Yugoslavia, and or green GDR. In other words, in an (un)intentionally state-organized shortage economy. That`s why basicly above 100 USD rather long as neutral or short. And rather neutral under 100 USD…100 USD not only useful
as a stop mark for conservatives
– much more as a short-term entry point
for speculatives in the case of ongoing war

Regardless of that, more or less USD 106, USD 114, and/or USD 124 are important support levels for bulls and resistance levels for bears.

In order to preserve the upward trend above USD 100 in the medium term, bulls need prices above USD 120! Why? Because at price actions above USD 120, the gap from the last candlestick to the previous high is closed in retrospect. And then even a medium-term W trend reversal formation could form. Which could then even generate a long-term buy signal at new high price actions.

Let’s hope not as consumers at the gas station! And stay self-determined voluntarily, with prices above 100 USD, just long – in this trading capability. And then also independently of my opinion, independently of my comment, and or but also independently of my technical analysis.