28.05 EU is negotiating a deal on Russian oil embargo

According to Bloomberg EU is leaning towards exempting pipeline deliveries from embargo to bring Hungary on board plus Hungary would not want to miss out on its share of RePowerEU package.

Pipeline deliveries are not insignificant but still a minor part of Russian crude exports. If EU agrees on Russian seaborne crude ban Russian exports will take a significant hit. Also, Germany and Poland intend to wean off Druzhba pipeline no matter what EU action is.

The charts are also telling that a major move can be around the corner. It is a rare occasion that my charts agree with headlines. Most of the time I act as a contrarian, but now my technical analysis and public sentiment are aligned.

Brent chart looks like it is going to explode. RSI is overbought but as R.Prechter's team points out major moves often happen when RSI is in overbought position. Looking solely on Brent chart I would not rule out that the market is poised to open with big gap on Monday.

Brent, 4hour

USOIL chart looks less provocative. Too many corrective shapes that does not conform to the traingle consolidation pattern as Brent chart did and therefore need to resolve in something else before next move. For now I kept the idea with a leading diagonal (see below) which fits the chart nicely but cannot be banked until it is formed. In that case the price action may take another week before the lift-off.

USOIL, 4hour

Best of luck with trading,



It is not the intention of this report to give out buy or sell signals or any trading advice. This material represents my view on the markets and shall not be regarded as an invitation to open trading positions. The report and any materials on this site avoid discussion on politics and exist solely to provide an interpretation of what is happening in the financial markets.

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