WTI Oil Is Stuck Near $77.50 As Traders Wait For Russian Oil Price Cap Details

Key Insights

• No consensus on the Russian oil price cap scheme has been reached yesterday. 
• Negotiations will continue, and oil traders will remain focused on this story. 
• A move below $77.25 will push WTI oil towards the next support level at $76.75.

Traders Stay Focused On The Russian Oil Price Cap

WTI oil is trading near the $77.50 level as traders continue to wait for the details of the Russian oil price cap scheme.

Yesterday, reports indicated that the price cap may be set in the $65 – $70 range. These reports had a negative impact on oil markets as Russian oil exports may remain intact if the price cap is set at $70.

At this point, no consensus on the price cap has been reached, and it remains to be seen whether any news will emerge in the next few days due to the holiday in the U.S.

Meanwhile, China reported a record number of new coronavirus cases. While most cases are asymptomatic, China maintains its strict zero-COVID policy and imposes local lockdowns, as well as other restrictions. These measures hurt economic growth in China and put pressure on demand for oil, which is bearish for oil markets.

While the situation in China is important, oil traders will stay focused on the price cap story. If the price cap is set at $70, oil markets may find themselves under more pressure.

WTI Oil Tries To Settle Below The Support At $77.25

WTI oil has been extremely volatile in recent trading sessions. RSI remains in the moderate territory, so there is plenty of room to gain additional momentum in case the right catalysts emerge.

The nearest support level for WTI oil is located at $77.25. In case WTI oil declines below this level, it will move towards the next support level at $76.75. A successful test of the support at $76.75 will open the way to the test of the next support level at $76.30.

On the upside, the nearest resistance level for WTI oil is located at $78.00. In case WTI oil climbs above the $78 level, it will head towards the next resistance level, which is located at $79.15. A move above $79.15 will push WTI oil towards the psychologically important $80 level.

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