Brent crude oil price bounces nearly 40% at one point yesterday and has ended up with 20% gains. It was the first record intraday surge, may set a positive tone for the global equity markets, especially for energy stocks. The Brent crude ended $4 or 20.00%, witnessed a big commodity bounce from the 18-year lows hit in early Q2 2020. Is it a bear market rally? 

On Thursday Trump tweeted: “Just spoke to my friend MBS (Crown Prince) of Saudi Arabia, who spoke with President Putin of Russia, & I expect & hope that they will be cutting back approximately 10 Million Barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!” 

Followed Trump’s comments on twitter, Saudi Arabia called an “Urgent” meeting of the OPEC+ alliance, and other producers to negotiate a supply cut deal. 

Whereas “Russia denies Trump claim that Putin spoke with Saudi Crown Prince,” Al Arabiya reported. “No, there was no conversation,” Putin’s spokesman Dmitry Peskov told Interfax news agency, adding that “so far” there were no plans for such talks after Trump said the Saudi crown prince had spoken to Putin and he expected them to agree on a cut in oil production.

IEA cited, “The oil world has seen many shocks over the years, but none has hit the industry with quite the ferocity we are witnessing today.” 

The Brent crude oil bounced around 80% and 50% in the past two major corrections.

The supply shock led to the current correction. Buy the rumor sell the fact. Before yesterday’s massive move, we tweeted a bullish target at $30-31 levels. 

Supports located at $29.50 and $28.30. If the price is moving higher, resistance located at $30.70 and $32.40 levels. 

  • Double bottom at $27-Weekly (closing basis)
  • Support zone: $25.80-$25.00 daily basis
  • Resistance: $36.70 >$37.60 and $40.00.
  • GAP spread between $45.22-$40.00. Will it fill the gap??

 It is important to always keep in mind the risks involved in trading with leveraged instruments.

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