Crude Oil Jumps 7% as OPEC+ Talks Continue, Crisis in Ukraine Intensifies

Crude Oil Price, Chart, and Analysis

  • Brent crude trades above $111/bbl. a fresh multi-year high.
  • Huge swings in retail oil holdings towards net-shorts.

For a list of all market-moving data releases and events see the DailyFX Economic Calendar

Brent crude continues to post fresh multi-year highs with price action seeing black gold jumping ever higher. A barrel of crude is now quoted around $111 compared to $57 a barrel one year ago. The war in Ukraine is the main driver of oil prices currently but with the oil market tight going into the crisis, the lack of supply is also helping to ratchet the price higher. The latest OPEC+ meeting started yesterday and resumes today, and with little to no additional supply expected from the cartel, the price of oil will remain heavily underpinned.

Yesterday the US and its allies announced that they would release 60 million barrels of oil from their strategic reserves to help allay the current shortage, however with global oil consumption seen around 96 million barrels a day, the release of these reserves had no effect on the price of oil.

The monthly Brent crude chart shows current price action in the middle of a multi-year sideways range seen between January 2011 and October 2014. Oil prices were driven higher in early 2011 by political turmoil in Egypt, Libya, and Bahrain and topped out in March 2012 around $128/bbl.

Brent Crude Monthly Price Chart March 2, 2022

Crude Oil Jumps 7% as OPEC+ Talks Continue, Crisis in Ukraine Intensifies

The daily chart shows oil breaking out of a basic bullish trend channel that has controlled price action over the past months. All three simple moving averages remain in a bullish pattern, while the only negative on the chart is an extreme overbought reading flashing on the CCI indicator.

Brent Crude Daily Price Chart March 2, 2022

Crude Oil Jumps 7% as OPEC+ Talks Continue, Crisis in Ukraine Intensifies

If we look at US Crude Oil, IG retail trade data show31.25% of traders are net-long with the ratio of traders short to long at 2.20 to 1. The number of traders net-long is 26.35% lower than yesterday and 26.45% lower from last week, while the number of traders net-short is 52.47% higher than yesterday and 40.53% higher from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Oil – US Crude prices may continue to rise.

Crude Oil Jumps 7% as OPEC+ Talks Continue, Crisis in Ukraine Intensifies

Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Oil – US Crude-bullish contrarian trading bias.

What is your view on Crude Oil – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

Source link