WTI plummets though clings to the $100 mark amid a mixed-mood

• Geopolitical developments in Eastern Europe calmed investors as oil dropped $8 of its price.
• Market sentiment remains fragile, though it is mixed, spurred by Russia-Ukraine and another Covid-19 outbreak in China, which weighed on WTI.
• WTI Price Forecast: Upward biased, but might consolidate as energy-related issues pending to be solved.

The US crude oil benchmark plunged on a “somewhat” improvement on risk sentiment and dropped earlier back under the $100 mark for the first time in two weeks. Russian-Ukraine officials reported progress in discussions, confirmed by US Deputy Secretary of State Sherman, commenting that Russia has shown signs of willingness to engage in “substantive negotiations.” At the time of writing, Western Texas Intermediate (WTI) is trading at $102.39.

The market sentiment is mixed, as European stock indices ended the session in the green, contrarily to the US, when the only gainer is the Dow Jones Industrial up 0.54%, at 33,123.14. Additionally to the geopolitical jitters in Eastern Europe, an outbreak in Covid-19 cases in China, in Shanghai and Shenzhen, weighed on the black-gold prices, as they are isolated into lockdown, according to China’s zero-tolerance stance.

Overnight, WTI’s traded within last Friday’s highs around $110 but briefly dropped under the $100 mark, around $99.78 on the diplomatic solution to the Russia-Ukraine conflict. Nevertheless, crude oil Is set to remain high unless there is an advance on Iran’s nuclear deal which would add 1 million BPD to the market, while the International Energy Agency (IEA) chief Fatih Birol urged oil-producing countries to pump more.

Late in the week, the Federal Reserve is expected to begin its tightening cycle for the first time since 2018, which should boost the greenback. In consequence, it could weigh on the dollar-denominated oil.

Therefore, US crude oil might head into consolidation, as geopolitical jitters, the Iran nuclear deal, and the US lifting sanctions to Venezuela, remain pending, relieving some pressure on the oil market.

WTI Price Forecast: Technical outlook

WTI’s remain upward biased, as shown by the daily chart. Worth noting that today’s price action pushed oil towards the confluence of the 61.8% Fibonacci retracement and the mid-parallel line between top-central Pitchfork’s parallel lines though short of reaching the $99.50 area, a problematic support level to challenged by oil bears.

That said, US crude oil’s first resistance would be the 50% Fibonacci retracement at $102.34. Once breached, the next supply zone would be the 38.2% level at $105.62, followed by Pitchfork’s top-trendline around $106.00.