USOIL Slides After Monday’s 7+ Year Highs

  • USOil
    (${instrument.percentChange}%)

USOIL – H4

The situation in Ukraine is the driver behind the commoditiy's recent surge, which helped it to the highest levels since September 2021 on Monday (95.83).

The United States have repeatedly warned of imminent Russian invasion in Ukraine, with US national security adviser Jake Sullivan saying that "a major military action could begin by Russia in Ukraine any day now", in Sunday's interview on CNN's State of the Union [1].

On Monday US secretary of State Anthony Blinken announced the relocation of the US Embassy in Ukraine "due to the dramatic acceleration in the buildup of Russian forces", heightening fears of war [2].

Today's latest news however, of some Russian troops withdrawals from the Ukrainian border, have sparked a positive reaction to markets.

Ministry of Defense of the Russian Federation announced that "The units of the Southern and Western military districts, having completed their tasks, have already begun loading onto rail and road transport and will begin moving to their military garrisons today. Separate units will march on their own as part of military columns" [3]. The Russian army still conducts large-scale drills though, most notably along with Belarus.

USOIL drops on the news, shedding around 2% on the day and caution is needed as markets react to a stream of news around the issue. It is now vulnerable to the ascending trend-line from this year's lows, but new catalyst will likely be needed for a bigger decline that would challenge the EMA200 (at around 85.40-85.70).

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Despite today's trouble, bulls are in the driver's seat above the EMA200 and have the ability to take another crack at 95.94, that could allow them to look towards $100/barrel.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 15 Feb 2022 https://edition.cnn.com/2022/02/13/politics/jake-sullivan-cnntv/index.html

2

Retrieved 15 Feb 2022 https://www.state.gov/operations-at-u-s-embassy-kyiv/

3

Retrieved 03 Jul 2022 https://eng.mil.ru/en/news_page/country/more.htm

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