Oil Confirms Bullish Triangle Breakout

The WTI oil traded more than 3% higher ahead of the US session, jumping toward 107 USD. Further gains cannot be ruled out. 

Oil embargo done

President of the European Commission Ursula von der Leyen urged a phased oil embargo on Russia in response to its conflict in Ukraine, as well as sanctions against Russia's leading bank, in an attempt to further isolate Moscow.

However, once an embargo is imposed, Europe will continue to acquire Russian oil through third nations, according to Vladimir Dzhabarov, first deputy head of the Russian upper house's international relations committee, quoted by the RIA news agency on Wednesday.

Traders are also anticipating a statement from the Federal Reserve of the United States later today.  The central bank is ready to step up its efforts to lower the rising inflation by increasing interest rates and shrinking its balance sheet.

Ascending triangle pattern

The daily chart looks like a perfect triangle pattern. First, the price broke above the bearish trend line, retested it, and now we see some bullish momentum.

The full potential of this formation is circa 25 USD, thus targeting new cycle highs above 130 USD. That would cause more inflation pressures and an inevitable recession in many countries.

On its way up, bulls need to push the price above 118 USD, where previous highs are.

Alternatively, if oil was to drop from these levels, the support could be found at the psychological 100 USD threshold.