• WTI price is rebounding as Russian sanctions offset China covid risks.
• Stronger US dollar on aggressive Fed’s tightening could limit the upside.
• WTI price needs to break the range between the 21 and 50-DMAs.

WTI (NYMEX futures) is rebounding above $101.00, having found strong bids once again on the 99.00 level.

The black gold is back in the green zone, despite the risk-off market profile, as the new Western sanctions against Russia over its civilian atrocities in Ukraine are overshadowing the concerns from China’s covid lockdowns.

The city of Shanghai is under extended lockdowns amid the relentless rise in covid cases over the last few weeks. This has fuelled demand concerns for oil and its products from the world’s second-biggest oil consumer, China.

Amidst the escalation of the Ukraine conflict, investors are flocking to the safe-haven US dollar, which may limit the renewed upside in US oil. Also, the dollar is benefiting from the hawkish Fed’s expectations heading into Wednesday’s FOMC minutes.

From a near-term technical perspective, WTI bulls remain hopeful so long as they hold above the upward-sloping 50-Daily Moving Average (SMA) at $98.60.

If the recovery momentum sustains, then the WTI price could look to retest the bearish 21-DMA, now at $104.00.

The next challenge for bulls will be to scale the previous day’s peak of $104.60 convincingly.

The Relative Strength Index (RSI), however, holds below the midline, currently at 48.77. This suggests that the rebound could likely be a temporary one.

If bears take out the critical 50-DMA support, then a sharp sell-off towards the $95.00 level cannot be ruled out.

Further south, the mid-March lows of $92.36 will be on the sellers’ radars.

WTI: Daily chart

WTI: Additional levels to watch