Brent clocked 5-month high of $46.10 and trades around the same in early Europe today. Markets ignored a record high weekly inventory buildup reported by US government and cheered IEA’s forecast of sharp drop in non-OPEC output in 2016
Formation – Rising channel
Resistance – $46.47, $47.65, $47.97
Support – $44.90, $43.32, $42.51-42.27
Oil news
Oil looks unstoppable as of now, focusing on every other piece of good news. Moreover, analysts continue to talk about excess supply and rift between Saudi Arabia and Iran and view the current rise in prices with skepticism. The bullish momentum may continue so long as unless retailers begin taking note of the latest price rise and sentiment shifts to the bullish side.
Formation – Rising channel
Resistance – $46.47, $47.65, $47.97
Support – $44.90, $43.32, $42.51-42.27
- Brent’s day end closing well above $44.90 after a rebound from rising channel support indicates a potential for a rally towards $47.97, which is 23.6% Fibo of June 2014 high-Jan 2016 low).
- Daily RSI is nearing overbought zone and may result in short-term loss of momentum and sideways to positive action.
- On the downside, $44.90 is a strong support. A violation there would expose $43.23. Only a break below the same would signal short-term bullish invalidation.
Oil news
- US crude inventories climbed 2.08 million barrels to 538.6 million barrels last week, the highest level since 1930, EIA data showed.
- US crude output fell to 8.95 million barrels a day in the week ended April 15.
- IEA expects biggest non-OPEC output fall in 25 years.
Oil looks unstoppable as of now, focusing on every other piece of good news. Moreover, analysts continue to talk about excess supply and rift between Saudi Arabia and Iran and view the current rise in prices with skepticism. The bullish momentum may continue so long as unless retailers begin taking note of the latest price rise and sentiment shifts to the bullish side.
