While the Russia-Ukraine conflict continues to escalate, Crude Oil has reached an important level of resistance. Therefore, it could be speculated that it is on the brink of a downside reversal.
Oil prices rose up to their highest levels since 2008 on Monday as the United States and European allies were considering a Russian oil import ban and the delays in the potential return of Iranian oil to global markets intensified supply fears.
With banks and travel stocks falling the most as rising oil prices added to concerns over spiraling inflation and slowing economic growth, U.S. stock futures were heavily affected.
As soon as the market opened on Monday March 7th, Oil price reached $131.30, this action puts the index on track to form a new bearish trend, suggesting potential for an exhausted rise. After that impulsive rise at the opening of the market it backed down to around $120.00 and it has created a small range around that area for now.
The RSI (Relative Strength Index), was at just above 88.00, currently giving sings of being overbought, could also support furthermore, the theory that a reversal is on the horizon.
In any event, crude could still revolve around those levels through the week. However, in 1990 and 2008, it only took one to two more weeks, before crude oil then reversed violently to the downside.
Sooner rather than later, we will see if the rise of Oil was just circumstantial and brief or if the ramifications of the conflict will impact the price even more in the long run. Accentuating the sentiment of a global recession.
