Crude oil aim for $140 as US and UK ban Russian oil

The market chaos caused by the war in Ukraine hit a new level as the U.S. officially announced plans ban imports of Russian fossil fuels, including oil. A move that is a bombshell to attack Russia’s economy and comes with a cost to the US’s economy.
The UK joined the US with the sanctions though it will continue to allow natural gas and coal from the country. Other European nations that rely heavily on Russian fuels decided not to participate.

The price of crude oil has surged by 30% since the war started and 94.72% from this time last year. The supply-side shock has been spreading across all the major commodities that Russia exports, including oil, gas, grain, and metals.

Russia’s percentage share of key global commodity production in 2021

Key commodity price change after Russia’s invasion

Brent crude

Given that there is no sign that the underlying oil supply crisis could be eased in the near term, it’s not hard to foresee that the price will keep pushing higher. This week alone, the cost of both Brent crude and WTI have reached their highest level since 2008. The next target for crude oil in view would be the all-time-high level at $140, last seen in June 2008.

From a technical point of view, the gap created earlier this week has offered massive support which was demonstrated over the last three trading days. The peak of $146 from 2008 now looks like to be the next destination, just in a matter of time.

WTI

The recent high at $128 looks like to be the imminent resistance for the WTI, and the level of $114 will be the current support level. However, as the market is now trading at the headlines, the outlook will highly depends on how things change in regards to the supply crisis deteriorated by the war.

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