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WTI Crude Oil Rises on Geopolitical Risk

Oil prices rose today amid increasing tension between the West and Russia after last week's tragic downing of a passenger airplane over Ukrainian skies. There is pressure from Europe to increase sanctions on Russia, which can tighten oil supply. 

WTI Crude Oil rallied sharply after initially testing the 103 area. It has now pushed above a falling trendline from the 6/22 high of 107.36. It is also pushing above 61.8% retracement of the decline from 107.56 to 99.02. This rally now puts the focus back on the 2014-high of 107.36.

Meanwhile in the 4H chart, the RSI is popping up above 70, and price has crossed above the the 200-, 100-, and 50-period SMAs.

WTI Crude Oil Price 4H Chart, 7/21

These are signs that we should at least shelved the bearish outlook. 

Geopolitical risk can be a fickle thing. Without actual sanctions and actual disruptions of supply, the risk premium priced in since last week could be faded. I would look for the near-term to short-term bullish attempt to continue. But if price approaches the 107.30 area, and the 4H RSI shows bearish divergence, I would expect sellers to fade back towrad the middle of the newly set range, around 103.30 (50% retracement) up to the 104 handle.