WTI Price Analysis: Corrects to test key support at $118.50, EIA data eyed
- WTI price is correcting the previous rally to 14-year highs of $126.51.
- US, UK bans Russian oil and gas imports over the Ukraine invasion.
- Bulls take a breather while bears test 21-SMA on the 4H chart is critical.
WTI (NYMEX futures) is looking to extend the corrective pullback from 14-year highs of $126.51, as bulls take a breather after the relentless upsurge.
Oil prices have been on an upward trajectory ever since Russia kicked off an invasion of Ukraine, gaining further upside traction following reports that the US is likely to announce a ban of Russian oil imports without the participation of its allies.
US President Joe Biden did announce the ban on Russian oil and gas imports, as expected, on Tuesday, as traders resorted to a ‘sell the fact’ trading. This triggered a corrective pullback in the black gold.
WTI price is also receding as there is a lack of fresh headlines on the Russia-Ukraine war while investors shift their attention towards the Energy Information Administration (EIA) Crude Oil Stocks Change data, especially after the US announced that it will release oil from its reserves.
From a near-term technical perspective, WTI bulls remain hopeful so long as they hold above the upward-sloping 21-Simple Moving Average (SMA) at $118.51 on the four-hour chart.
The Relative Strength Index (RSI), however, is turning lower towards the midline, justifying the latest downtick in WTI price.
If bears take out the 21-SMA support, then a sharp sell-off towards the bullish 50-SMA at $108.88 will be in the offing.
On the flip side, the intraday highs of $122.96 will act as the initial hurdle, above which the multi-year high will be back on buyers’ radars.
WTI: Four-hour chart
WTI: Additional levels to watch