Oil prices have hijacked the financial market headlines by surging to levels not seen since 2008.

Brent crude punched above $131 on Tuesday as the United States and Britain moved to ban Russian oil imports. Given how such a move is likely to squeeze supply and create further disruptions in the global energy market, this could propel the oil prices even higher.

Since the start of March, both WTI and brent have appreciated over 30% as the Russian-Ukraine tensions intensified. With oil gaining roughly 65% year-to-date and slowly approaching all-time highs, the next few days promise to be eventful for the global commodity.

Directing our attention away from the fundamentals, the technicals are heavily bullish on the daily, weekly, and monthly timeframes.

Oil’s explosive momentum on the monthly timeframe resembles a speeding train reaching maximum velocity with geopolitics keeping the engines running at maximum capacity. Things are looking incredibly bullish with the first key level of interest being the all-time high at $147.50. A breakout above this level will open the doors to uncharted territories. If the upside momentum runs out of steam, a decline back towards $115 could be on the cards.

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Looking at things on the weekly charts we see a similar story. Prices were already respecting a bullish channel before geopolitics injected bulls with renewed confidence. There have been consistently higher highs and higher lows while the MACD trades above zero. The next major checkpoint for bulls remains the all-time high at $147.50. A failure to push beyond this point could result in a decline back towards $115 and $100, respectively.

A throwback could on the horizon for brent if $131 becomes a resistance level. Such a development may take prices back towards $118 and $100 before bulls re-enter the scene. The trend remains firmly bullish on the daily charts with lagging and leading indicators signalling further upside. Should the fundamentals continue supporting oil bulls, the path of least resistance should remain north.

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