OIL REVERSES LOWER, AS ANXIETY ABOUT THE GLOBAL ECONOMY GROWS

The last few weeks have been incredible for crude oil. Despite China’s lockdowns, risk aversion, and global growth worries, oil prices have been remarkably resilient. On Friday, it closed at a six-week high in what looked like it could be the break of a pennant. The price closed above previous highs, which means that the pattern of lower highs was broken.

Today, it’s a different story though. Ultimately, oil depends on healthy global demand, and the ongoing rout in equities isn’t painting that kind of picture. The decline in stock markets has resumed today. With that, WTI crude is now back to $105.35 from a high of $111.15 on Friday.

That messes up what had been a nice looking technical trade. As (almost) always, when the chart is too perfect, it doesn’t work. Now there’s the potential for a false breakout reversal. Or we continue to chop along in the $95-$115 range. In the latter case, I take that as a win for the bulls. Anything about $95 in this environment highlights supply shortages.

EU’s new round of sanctions include oil ban but still missing agreement on investment in oil infrastructure, sale of property to Russians in Cyprus

• Considers more funds for oil infrastructure in eastern Europe in bid to get a deal

The bottom line here is that a deal is getting closer. That said, Russia’s real problem is transport. There are buyers for its oil all over the world and if they can get more tankers in ports, then they can continue to export.