WTI extends recovery on supply worries, peace talks pessimism

WTI oil extends recovery into fourth consecutive day, with fresh acceleration on Monday, being sparked by renewed supply concerns after Ukraine attacked Russian oil installations.

Escalation of geopolitical situation and discouraging signals from the peace talks are currently the key drivers of oil price, although rally might be facing headwinds from lower demand if tensions rise further.

Technical picture is improving following formation of bullish engulfing pattern on weekly chart, as well as break of 100DMA ($64.24), as recovery approaches next pivotal barrier at $64.90 (Fibo 38.2% of $70.50/$61.44).

Firm break here would provide fresh impetus to renewed bulls and open way for further recovery but overbought stochastic on daily chart and north-heading 14-d momentum being still below the centreline, warning of potential recovery stall.

Repeated close above broken Fibo 23.6% ($63.58) is minimum requirement to keep fresh bulls in play, with sustained break above $64.90 to expose $65.97 (50% retracement / daily Kijun-sen) violation of which to further strengthen near-term structure.

Daily cloud twist on Friday, could be also magnetic.

Res: 64.90; 65.12; 65.97; 66.50
Sup: 64.00; 63.58; 63.07; 62.51