WTI Crude Oil prices experienced a modest uptick in the Asian trading session on Monday, building on the nearly 4% increase from the previous week.
This surge is primarily attributed to perceptions of a tightening supply, exacerbated by ongoing assaults on Russian energy facilities, positioning the WTI Crude Oil price forecast in a cautious yet upward trajectory.
Impact of Strikes on Russian Refineries
The recent attacks on Russian refineries have introduced a $2-$3 per barrel risk premium into crude prices. According to Vandana Hari, founder of Vanda Insights, these premiums persist as the new week commences with additional attacks.
Although the market awaits more definitive signals for the next major price movement, the impact of these strikes is undeniable. Notably, an attack on the Slavyansk refinery led to a temporary blaze, underscoring the vulnerabilities in Russian refining capacity, which has seen approximately 7% idleness in the first quarter.
Geopolitical Tensions and Market Sentiment
The geopolitical landscape continues to influence market dynamics, with Israeli Prime Minister Benjamin Netanyahu’s recent confirmation of military plans in Gaza’s Rafah enclave stirring regional tensions.
Such developments, alongside comments from German Chancellor Olaf Scholz, highlight the intricate relationship between geopolitical events and oil market fluctuations.
Anticipations Ahead of the Federal Reserve Meeting
The market’s focus shifts towards the upcoming U.S. Federal Reserve meeting, with outcomes likely to clarify interest rate directions. Analyst Tony Sycamore of IG notes that while rates are expected to remain unchanged, the June meeting’s decisions are highly anticipated, given their potential to impact the U.S., the world’s largest oil consumer, and thereby influence oil prices.
Despite a slight dip on Friday, both benchmark oil contracts recorded gains last week, buoyed by a bullish demand report from the International Energy Agency (IEA). The IEA’s revised demand outlook and the unexpected prediction of a slight supply deficit this year further underpin the optimistic USOIL price forecast.
Additionally, U.S. fuel demand lends support to prices as refineries conclude various projects, suggesting a nuanced but hopeful outlook for WTI Crude Oil prices in the near term.
WTI Crude Oil Price Forecast
On March 18, WTI Crude Oil (USOIL) exhibited slight fluctuations, with a marginal decrease of 0.08%, positioning the price at $80.91. The market’s current stance is underpinned by a pivot point at $80.49, suggesting a bullish trend if prices remain above this threshold.
Resistance levels are staged at $81.59, $82.48, and $83.48, delineating potential ceilings for upward movements. Conversely, support levels are identified at $79.47, $78.53, and $77.33, marking critical junctures for potential downtrends.
Technical analysis reveals a Relative Strength Index (RSI) of 61, indicating a moderately bullish momentum without venturing into overbought territory. The 50-Day Exponential Moving Average (EMA) stands at $79.45, further corroborating the asset’s bullish outlook.
Notably, a previously breached double-top pattern around the $80.49 level now serves as a significant support, hinting at the possibility of continued upward traction.
The analysis suggests a prevailing bullish sentiment for WTI Crude Oil, contingent upon maintaining support above $80.49. A breach below this level, however, could precipitate a marked selling trend, shifting the market’s dynamics.