Energy bulls are clearly in control this morning especially crude oil bulls. Brent crude (BNO, quote) continues its climb breaking through the $107 level.
WTI crude oil (USO, quote) is following suit as it breaks through the $100 level at end of trading yesterday and rocketed higher in early trading this morning breaking through the $101 resistance level to $100.175.
Yesterday’s U.S. energy report should have helped the bears with 10th straight inventory build. In fact talks continue to surface that either the wells will need to capped or the U.S. government needs to lift the crude oil exporting law to allow crude oil exports.
Why the run higher?
It’s a pure political turmoil rally. Reports are hitting the wire that U.S. and E.U. are planning to increase its sanctions on Russia (RSX, quote). The U.S. and E.U. said they will work together to strengthen the sanctions on the annexation of Crimea.
The new sanctions are designed to further isolate oil producing country of Russia.
Until the Crimea situation is resolved both WTI and Brent crude oil will carry a premium and continue to climb.
Bottom Line: look to see if the $101 level turns from resistance to support and then target the $102.10
You must be logged in to post a comment.