The bullish undertones continue to play out for oil as a tighter market beckons following the Russian oil embargo being imposed by the EU here. The proposal may have been a watered down version of what might have been but it is still not going to help much with the ongoing demand-supply imbalance we are seeing. Add to the fact that OPEC+ will continue to sit on its hands, I still see upside risks to oil prices barring any major demand destruction.
The recent developments in China is also helping, as Shanghai and Beijing are easing lockdown restrictions. That is buoying sentiment to start the new week and oil prices are definitely running with that.
WTI crude broke resistance from the 24 March high at $116.61 and is extending gains to above $118 on the day. The next key psychological level to watch will be the $120 mark but with Brent crude sailing past that to near $123 at the moment, there might not be much technical resistance on the way up.
The surge during the early stages of the Russia-Ukraine conflict will obviously be the major levels to watch. As such, the $130 level will be rather significant. However, considering how tight the market is and with the squeeze potential, I'm not ruling out a further surge in prices beyond that going into the summer season as conditions are looking ripe.