Will corrections be shallow?
Oil prices have been rising once again over the last week as the EU has considered banning Russian imports and an outage on a pipeline that runs through the country reduced output by around one million barrels per day.
Sanctions imposed by the West have already caused significant disruption to Russian oil exports which could total around three million barrels per day, on top of the one million coming through the country from Kazakhstan.
In an already very tight market, that could continue to support crude prices in the coming months, and should further disruptions occur, much higher prices could follow.
In times of such volatility and headline-driven markets, technical analysis can be less useful as we see massive price swings throughout the day. But it can still be useful to be aware of key levels, as we saw earlier this month when the price rotated around $100.
If the price continues to correct lower, one notable level that could be interesting is $111. This marks the 50% retracement of the recent lows to highs and the bottom of the 55/89-period SMA on the 4-hour chart.
Prior to this, $114 could also be interesting, being the 38.2% retracement and the top of the same SMA band.
Of course, as already mentioned, news is breaking all the time and the market will continue to be very sensitive to it.