Oil Analysis: Oil may test above $107/Barrel

The crude oil price broke the history in April 2020 and moved back to $00.barrel less than two years ago though the crude oil price is now $92 / barrel.

Due to the Corona effect, crude oil prices have been low for a long time, but crude oil prices have been rising steadily since April 2020 due to rising demand.

However, there is no doubt that crude oil has risen sharply in recent weeks due to the Russia-Ukraine issue because Russia is the largest energy supplier to Europe.

Although Russia is not a member of OPEC, it is one of the world's largest exporters of crude oil. The Middle East crisis also has been responsible for the volatile oil market for years.

Crude oil prices have plummeted due to the smuggling of special ISIS oil stealing. The US also has given economic sanctions on Iran. That's why it has forced Iran to sell crude oil at much lower prices to several countries, including China.

The international community has deliberately destabilized the oil market. The oil price is much higher now, so it was natural for oil-exporting countries to increase supply, but crude oil prices are not falling due to several geopolitical issues.

However, if this geopolitical problem is not resolved in the foreground, the price of crude oil may soon exceed $100 per barrel.

Oil price is directly involved in inflation. If the price of crude oil goes up worldwide, the price of every goods and service will go up in the developed world. Commodity prices can create hyperinflation when the purchasing power of the ordinary person goes out. In that case, it is not uncommon for the world to move towards another economic recession.

Technical Analysis:

The current crude oil price is $92 / barrel. The market has dropped a bit from last week's trendline resistance. And from the current rate, the trendline support price is $85.63 / barrel.

If next week the Russia-Ukraine issue declines or does not rise further, there is a possibility of a slight drop in crude oil price correction. But until then, crude oil prices won't drop much.

However, if the price of crude oil falls below $85/barrel for some reason, the market will first test $77.50/ barrel. And the next target is 65/62 dollars/barrel.

However, Crude prices can only drop if the geopolitical problem resolves or an announcement from OPEC increases oil extraction. Although so far, no such symptoms have been seen.

On the other hand, if the Russia-Ukraine problem escalates further, the market will test $97 / barrel again. The next target is $100 / barrel, and the last $107 / barrel is more likely to be tested this year.

However, for some reason, it is better to stay in buy mode on crude oil, especially if it is available at $75/73 / barrel. It may be better to stay in buy mode with a few pips stop loss.
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Because as the days go by, the global crisis continues to grow, and oil prices have been low for a long time because of Covid-19. Many countries have not been able to import oil. That is why there is so much demand for crude oil right now, and the demand for crude oil will probably continue to increase throughout 2022.

You have to remember resistance level should never be a good choice for buying crude oil. When the crude price comes to a support level after correction, it would be better to stay in buy mode from the support level.

Trade closed: target reached