Oil claw back above $100 after a breach below on Tuesday

WTI crude oil futures price

Chicago WTI crude oil futures price is up 4.26% at $104.01 pe barrel on mid-Wednesday trades.

Crude oil opened this week on a bearish note witnessing heavy selling pressures as prices dropped around 6.0%. On Monday, the broader market selloff resulted from the European Union (EU) softening up on its earlier proposal to ban Russian crude oil imports. The situation – selloff was exacerbated as market participants priced in global recession as central banks across the globe hiked interest-rate or planned to do so.

Prices declined further on Tuesday due to rising inventories of crude oil and its products. The American Petroleum Institute (API) reported stock of 1.618 million barrels, compared to analysts’ predictions of a 1.2million-barrel draw.

Oil prices rose on Wednesday after plunging nearly 10% over the last two trading sessions, supported by supply concerns. The European Union is working on generating support from its member states, particularly Hungary. It also gained on hopes of the Chinese economy receiving stimulus support as inflation eased and COVID-19 infections lowered.

On the technical side, the RSI of Chicago WTI crude oil futures stood at 50.50 and is currently trading below all SMAs: MA (20), MA (50), and MA (100). So, BUY position can be taken with the following target and stop-loss:

TRADE SUGGESTION: CHICAGO WTI CRUDE OIL FUTURES – BUY: 104.6, TARGET: 108.7, AND STOP-LOSS: 101.6

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