Oil continues to push higher on the day, where to next?

From a technical perspective, it is hard to go against the rise/break in oil prices at the moment.

WTI W1 04-02

WTI crude is trading to its highest since 2014 and there isn’t any clear resistance all the way through to $100 perhaps next. However, there is still plenty of food for thought despite the technical appeal. I outlined that earlier:

“The news involving Russia and Ukraine may have helped with the surge higher but it is tough to go against the charts at this stage. The only thing I would be mindful about is that this week’s gains would be the seventh consecutive one for oil, and that is quite a stretch.

That is not to mention the size of the move. The run of gains here came from when price was below $70. That marks a near 30% jump in prices since the beginning of the rally.

I have been and am still a major oil bull but we are getting to the point where I reckon prices may see more of a ceiling soon enough. $100 is a big level to watch in that regard. Just about every big house is calling for that, so it is quite the psychological barrier.

I fear that once geopolitical tensions involving Russia and Ukraine abate, that might be a great ‘excuse’ for traders to scale out on longs. That might be where oil hits a bit of an air pocket and finally meets a correction after the recent rally.

No one can say for sure how that pans out but I highly doubt we’ll see any major military escalation, not in this day and age surely.

That said, tensions may still persist for longer and alongside more favourable technicals, this oil rally may still have more legs to go running further.”

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