WTI Crude Rallies on Sanctions and Freeze Risk: $80 in Sight?

WTI Crude Oil Futures (February)

Friday’s Settlement: 76.57, up +2.65 [+3.58%] for the day, up +2.61 [+3.52%] for the week

On Friday, the Biden administration imposed its most aggressive sanctions on the Russian oil industry. The sanctions target two firms that handle 25% of Russian oil exports. The actual enforcement of Russian oil sanctions has been a key driver in this bullish move as the global balance sheet shifts.

The two firms sanctioned, Surgutneftgas and Gazprom Neft, shipped an average of 970,000 bbls a day in 2024 – making this announcement a considerable bullish catalyst from a fundamental standpoint.

Today, futures are higher by +1.30 [+1.70%] to 77.85

Friday’s announcement of Russian oil sanctions is still driving markets higher this morning as India announced they will abide by the sanctions and turn away sanctioned tankers.

Extended-range forecasts for North America also show another cold shot coming through the U.S. and into Texas, likely aiding markets on additional Texas freeze risk-premia.

Also, while the headline sanctions were focused on Russia, the fully updated list contained a Chinese company, Shandong United Energy Pipeline Transportation. This inclusion will likely heighten tensions between the U.S. and China.

Technical Analysis

Friday’s settlement above the October highs of 76.41, a major three-star resistance level, has set up the chart for a run towards the spring and summer highs of highs of 79.59-80.14.

The key for today is a settlement above that 76.41*** level, and a failure to do so could result in profit-taking and corresponding market weakness.

Today, markets are already trading above Friday’s high of 77.86. Technically, markets are in a full break-out towards the 79.59-80.14*** resistance level. Support and resistance levels at current prices are few and far between up here and volatility is likely to be amplified.

For intraday trading, our pivot and point of balance is at..

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