Crude playbook - can Crude re-take the $100 level and hold?

A 10% high-low range - the highest range since November 2020 - is compelling enough to get scalpers to trade around the clock, so there would be some tired heads today. After hitting $102.19 and in the absence of cutting Russia from the SWIFT payment system and failing to target specific Russian exports, crude prices staged an incredible reversal, although support has been seen into the 20-day MA once again.

SpotCrude daily chart

(Source: Tradingview - Past performance is not indicative of future performance.)

The wash-up from the incredible movement is that client positioning is nuanced, with 53% of open exposures held long and with many positioned for a renewed tilt at $100 and a close above the rising trend resistance (drawn from the March 2021 lows).

It promises to be a big weekend for traders with the prospect for gapping (higher or lower) very much in play for Monday’s open – while there have been headlines on various government (including the Biden Administration) looking to release petroleum reserves, the sheer degree of shortages means any increased supply here will have a limited effect on Crude. We also have the OPEC meeting on Wednesday (2 March), which could be a volatility event for traders to put on their radar and with Russia part of the alliance it makes life challenging – I think OPEC+ wont deviate from the agreed output increase of 400k b/pd and essentially turn a blind eye to the tensions. However, the risk is they do increase output by more than 400k, which could cause a sudden retreat in crude. For now, though, it feels like the Crude bulls are in control and the path of least resistance is for higher levels.