CL New York Crude Oil – New sanctions on Rosneft support prices

Oil prices extended their gains after the US imposed new sanctions on Rosneft over Ukraine. U.S. crude futures climbed $1.26, or 2.20%, to $58.50. U.S. Treasury Secretary Jeffrey Bessant said on Wednesday: "Given President Putin's refusal to end this senseless war, the Treasury will impose sanctions on Russia's two largest oil companies, which are funding the Kremlin's war machine." The new sanctions target two major Russian oil companies, Lukoil and Rosneft. Oil prices were also supported by growing U.S. energy demand. The U.S. Energy Information Administration said on Wednesday that U.S. crude oil, gasoline, and distillate inventories fell last week due to stronger refining activity and demand. Crude oil inventories fell by 961,000 barrels to 422.8 million barrels last week, compared with analysts' expectations in a Reuters poll for a 1.2 million barrel increase. Investors are also closely watching the progress of U.S.-China trade negotiations, with officials from both countries set to meet in Malaysia this week.

As seen on the technical charts, the RSI and Stochastics have broken out of oversold territory, and the MACD is also crossing above its signal line, suggesting that oil prices are beginning to recover. Upward resistance is expected to lie at the 25-day moving average (MA) of $61 and the 50-day MA of $62.25. More importantly, attention will be paid to the 62.90 and 100-day MA of $64.60. The nearest support is expected to lie at $57.90 and $57.30, with the next level considered to be $56.30 and the May 5 low of $55.30.

Forecast range:
Resistance: 61.00 – 62.25 – 62.90 – 64.60
Support: 57.90 – 57.30 – 56.30 – 55.30

This week's news:
EIA: US refinery utilization increased by 2.9 percentage points in the first week
EIA: US crude oil imports increased by 656,000 barrels per day in the first week
EIA: US crude oil inventories decreased by 961,000 barrels in the first week
EIA: US gasoline inventories decreased by 2.147 million barrels in the first week
EIA: US distillate inventories decreased by 1.479 million barrels in the first week

Any questions? contact our professional analysis team