Crude breaks above resistance
Yesterday, the bulls finally got the breakthrough they’ve been working on for months now. Ever since front-month WTI broke below $70 in mid-December, oil has been gently pushing higher, although every attempt to break above $80 per barrel has been firmly rebuffed. But the intensity of the attack on this level of resistance picked up significantly this month. Yesterday WTI broke through and went on to hit its highest level since early in November when prices were still declining. There was no particular catalyst for the move, just a continuation of recent buying pressure. The question now is whether prices will continue higher, and if future pull-backs will find support at the old resistance level. Although there wasn’t a single trigger for the move, this week has seen several Ukrainian drone attacks on Russian refining facilities. US inventories have also seen larger-than-expected drawdowns, while forecasts for demand growth this year and beyond have been raised recently. It’s early days, but it’s possible that traders could look back on this week as pivotal for crude’s journey this year.
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