WTI price continued climbing on Thursday, even after the Federal Reserve’s hawkish announcement. After the Federal Reserve announcements signaling a rate hike in March, WTI price dropped slightly, but rallied again later. Brent price went above $90 per barrel on Thursday, while WTI climbed up to $89 per barrel, registering a new 7-year high.
Fears of a potential energy crisis are driving the price of the commodity up, as tensions continue to rise between Russia and Ukraine. If the situation escalates and Russia invades Ukraine, the EU might have to enforce economic and trade sanctions against Russia. This would cut-off the supply of oil and gas in the EU, creating an energy crisis.
Meanwhile, demand for oil is on the rise in the cold winter months and the rise of Omicron cases throughout the globe has not limited transportation as much as originally anticipated. Supply though cannot be increased so easily to match rising demand. Even though OPEC’s goal was to increase its output by 400,000 barrels per day, the organization has failed to meet this goal as some of its member countries struggle to increase their production levels.
The outlook for the commodity is bullish and it is currently trading around $87.7 per barrel, above the $85.7 per barrel resistance level. In case the trend is reversed, support may be found at the $77.8 per barrel level.
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