It looks like the futures will stay elevated at this point amid the ongoing Ukraine tensions
Oil prices finished the third bullish month in a row, holding at multi-year highs as Ukraine-related tensions persist. Traders continue to express concerns over potential supply disruptions after Russia’s invasion of Ukraine and related sanctions.
According to the latest Ukraine-related developments, the European commissioner for competition, Margrethe Vestager, said they can’t ban Russian gas completely. Meanwhile, Maersk, which is the world’s largest container shipping line, suspends deliveries to and from Russian ports. Now, traders stay alert after ceasefire talks between Russia and Ukraine failed to reach a breakthrough on Monday. Adding to buying pressure in the oil market, BP and Shell have announced plans to exit Russian operations and joint ventures.
Brent crude derived support from the ascending 20-DMA last week to resume the ascent following short-lived profit-taking. Oil futures are back above the $100 per barrel psychological level, extending gains to the levels just below the $102 handle during the European trading hours on Tuesday.
It looks like the futures will stay elevated at this point amid the ongoing Ukraine crisis. Furthermore, if the conflict continues to escalate, oil prices would advance further in the coming days or weeks. As such, now, the market focus could shift to the next upside target of $103.25 where September 2014 peaks arrive.
On the downside, Brent crude would ease below $98 first in case of a bearish correction. Should a deeper retreat take place, the futures may target the mentioned moving average, currently at $93.60. For the time being, it looks like the path of least resistance for Brent crude remains to the upside as supply-related worries continue to persist as Russia is a key oil and gas supplier, especially to Europe.