WTI crude oil is extending recent rally and it’s now eyeing 120 handle. EU leaders finally agreed yesterday to embargo on seaborne oil imports from Russia, which covers more than two-thirds of the imports. Another one-third is delivered via the Druzhba pipeline. Also, the embargo would be raised to 90% once Poland and Germany, which are connected to the pipeline, stop buying by the end of the year. The remaining 10% temporarily exempt including imports to Hungary along with Slovakia and Czech.
“This immediately covers more than 2/3 of oil imports from Russia, cutting a huge source of financing for its war machine. Maximum pressure on Russia to end the war,” European Council President Charles Michel said in a tweet.
WTI crude oil’s break of the near term channel resistance suggests upside acceleration. 118.57 near term resistance is also taken out. As long as 114.27 support holds, further rally would be seen, back towards 131.82 high.
Nevertheless, current rally from 93.47 is tentatively seen as the second leg of the medium term corrective pattern from 131.82. Hence, a firm break of 131.82 is not expected for now while sideway trading could extend for some more time.