Ever since the recovery from the pandemic started, the U.S. Administration has been constantly trying to fight the increases in Oil prices. The main reason behind that is due to the positive correlation between the Oil prices worldwide with raw material prices, and the prices of goods sold.
Oil prices has been sky rocketing since the beginning of year 2021. Despite those increases, the U.S. government played a vital role in some retracements that occurred.
For example, if we go back to November 23 2021, where Biden decided to release 50Miollion barrels of oil form the strategic Petroleum Reserve in order to lower prices for the citizens we notice that Oil prices did really decrease from approximately USD85/Barrel to mid-60s.
However, this movement (Figure 1) was not long lived, whereby we instantly saw and increase in prices heading to as high as USD125/Barrel.
Figure 1 : Source, TradingView WTI November 2021
This proved that given the supply of oil globally and in specific by the OPEC+ was not enough to cover the increasing demand in the world.
Currently Biden decided to further release from the SPR 1Million barrel per day for 1 month. This also had the same effect on the Oil prices, whereby (Figure 2) we witnessed a drop in the WTI crude oil from $125/Barrel to approximately $90/Barrel.
Figure 2 : Source, TradingView WTI March 2022
Currently prices are trending upwards, whereby we witnessed over 20 dollars increase in price which would be approximately a 20% increase.
This increase comes with no surprise, as the Ukrainian/Russian negotiations are heading towards a dead end as stated by the Ukrainian president.
Currently we have a possibility of a head and shoulder formation on the 4H TF.
If the price confirms the H&S formation, while we also see the MACD breaking below 0 and RSI breaking below 50, all these confirmations together might help the WTI to retest the prices of $104/Barrel.
However, the fundamental aspect is in the focus now given that major announcements are to be released regarding the negotiations this week.
Figure 3 : Source, TradingView WTI April 2022
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