WTI Oil Hits 9-Week High as Traders Focus on EU Meeting on Russian Sanctions

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WTI oil price rose to a nine-week high in early Monday, maintain bullish stance following last week’s 4.2% rally.

Traders focus on today’s EU summit, in which bloc’s leaders will try to reach an agreement on the sixth package of sanctions on Russia, on banning completely the imports of Russian oil.

So far, the EU leaders were not united in the decision, as it is still very difficult for the EU to reduce its energy dependency on Russian energy in the near-term, with the most dissonant tones coming from the Hungary and neighboring countries.

The oil market is already tight, amid rising demands for gasoline and diesel ahead of summer driving season and decision of OPEC+ bloc to stick to its existing plan for a limited output increase, with potential agreement on ban of Russia’s oil, to worsen the situation and send oil prices higher.

Technical picture remains positive on a daily chart, as bullish momentum continues to rise and moving averages are in full bullish setup, although overbought stochastic warns that bulls may lose steam as cracked barrier at 116.03 (Fibo 38.2% of $130.48/$92.64) marks significant obstacle.

Bulls may take a breather here, but expected to remain intact for break higher and acceleration towards targets at 118.02/120.00 (the bull-channel upper boundary / psychological).

Broken Fibo 50% level at 111.56 is reinforced by rising 10DMA and marks good support, which should contain potential dips and keep larger bulls intact.

Res: 116.03; 116.60; 117.40; 120.00

Sup: 114.80; 113.16; 111.56; 110.00