WTI Oil – near-term price action holds in extended sideways mode, awaiting fresh signals

WTI oil remains in a sideways mode and ranging between $80 and $90 for the second consecutive day, suggesting that the price action has temporarily stabilized after surge to near $120 per barrel on opening on Monday and subsequent drop of about $40 during Mon/Tue trading.

The latest comments from President Trump about the end of the war in the Middle East and about partial lifting of sanctions on sales of Russian oil, provided relief, with decision of International Energy Agency to release record 400 million barrels from strategic reserves in response to crisis, further cooling the situation and stabilizing the price for now.

On the other hand, fears that global economies could start feeling a full impact of the war through significant supply shortages, as Iran warned the world to be prepared for disastrous scenario of oil price running to $200 per barrel, produce an opposite effect that could inflate the price quickly in scenario of prolonged and escalating war (the US said on Monday that the war may extend towards September).

Long-legged Doji candle on Tuesday and today’s action being in similar shape, signal indecision, with significant barriers at $89.00 and $90, break of which to generate initial reversal signal and open way for stronger recovery.

Conversely, $82.00 (range base) offers solid support, followed by $80, loss of which would further weaken near-term structure.

Res: 89.00; 90.00; 91.41; 92.50
Sup: 81.80; 80.00; 78.40; 76.80