Oil prices are moving again, with both USOil and UKOil charting a higher trough followed by a higher peak on their respective weekly charts. I.e. the longer-term has reaffirmed its uptrend.
Besides an already established reluctance for trading houses to deal in Russian oil, the EU is on the cusp of banning energy imports from Russia. Complete bans need unanimous support from all 27 members of the bloc. However, Hungary maintains that it requires three and a half to four years to move away from Russian crude.
Additionally, OPEC+ is sticking to its timetable to raise production. This position is despite calls to increase supply to counter surging prices.
The weekly stochastics (blue arrows) have turned up because supply will continue lagging behind demand. As a result, upwards momentum will be dangerously entrenched if they move above 80 and hold these levels (red rectangle). I.e., if this happens, stagflationary pressures will exacerbate due to the generated momentum from the supply side.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.