Oil set for first weekly loss in nine as Russia-Ukraine mood music improves

I think the correction in oil here could last a bit after overseeing eight straight weeks of gains.

At this week’s high, oil peaked at $95.79 on Russian-Ukrainian tensions, but as recent session headlines show promising signs of hope, we’re seeing oil prices come down quite noticeably this that day.

Price is now down more than 2% at $89.75 and there is not much support for Oil until we hit the Feb 8-9 lows at 88.44-53 $. Beyond that, the 23.6 retracement level @ $87.92 will be the next key level to watch.

If anything else, I’d say a deep correction here has the potential to head towards the 38.2 retracement level @ $83.06 or even the 100-day moving average (red line). This would create attractive levels for dip buyers to reduce over the long term.

I’m still an oil bull overall, but I made my case clear earlier this week:

“I know there may still be a long time on oil like I am right now, so I’m going to share a bit about how I might end up playing this. If tensions escalate, I’ll I’ll stick to the longs but anytime there is a clear sign that we’re not heading for a military confrontation, I might consider deleting the entire position as I fear the “downside” this time around will be significant.

“Eight straight weeks of gains for oil is a huge length and if there’s any selling in the whole Russia-Ukraine situation, I think the selling can hit pretty hard. I’m tempted to maybe continue to invest via small lots and maybe extend the rest 80% of the position but come to think of it, if the decline is going to be pretty steep why not just play the tea leaves and the techniques and reduce the again long after.

I opted to remove 70% of my position on Feb 14th and will look to move into longs as I assess the corrective move. But while Russian-Ukrainian tensions are slowly normalizing, there is still no rush to turn the clock back.


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