WTI renews multi-day top above $116.00 as EU unveils sanctions on Russian oil

• WTI stays on the front foot around the highest levels in 12 weeks, up for the fifth consecutive day.
• EU Leaders release fresh sanctions for Russian oil imports, EC President Von der Leyen said oil coming through pipelines exempted.
• Risk-on mood, softer US dollar adds to the bullish momentum.
• China PMI and full markets eyed for fresh impulse.

WTI rises to the fresh high in three months, also printing a five-day uptrend, as the European Union (EU) leaders release details of sanctions on Russian oil imports during Tuesday’s Asian session. In doing so, the black gold rises to $116.41 before easing to around $116.20.

“EU agrees to ban 90% of Russian oil imports by end of 2022,” announced EU Council President Charles Michel. The EU, he says, ''agrees to de-swifting the largest Russian bank Sberbank, banning 3 more Russian state-owned broadcasters, and sanctioning individuals responsible for war crimes in Ukraine.''

It should be noted, however, that European Commission President Ursula von der Leyen mentioned that a ban on Russian oil exempts oil that comes through pipelines, which in turn triggered a pullback in oil prices after an initial rise.

Even so, the energy benchmark remains on the front foot as a softer US dollar and risk-on mood underpin the commodity’s run-up ahead of the key official PMI data from China. Also important to watch will be the return of full markets after Monday’s US Memorial Day holiday.

That said, the US Dollar Index (DXY) refreshed its monthly low to 101.29, before bouncing off to 101.34, on Monday as the latest PCE Core Price Index data, the Fed’s preferred gauge of inflation, came in softer and failed to favor some of the hawkish Fed members.

In addition to the EU sanctions and softer US dollar, China’s gradual opening up of the economy from the covid-led activity restrictions also underpin the risk-on mood and propel the WTI crude oil prices. While portraying the mood, the S&P 500 Futures rise 0.40% intraday by the press time.

Technical analysis

A clear upside break of the late March high surrounding $115.90 enables WTI bulls to aim for the $120.00 threshold ahead of challenging the yearly top surrounding $126.50.