The outlook remains favorable for the Brent crude oil, which has already rebounded strongly since testing the 100MA. Turning to indicators, the daily RSI lacks conviction whereas the oscillator is remaining bullish.
Under these conditions, keep an eye on the resistance between 67.80-68.00$, as a breakout above these levels would strengthen the upward momentum, with a new target the resistance levels around 70.00$. The price even could extend the rally towards 7050-70.70$.
Supports located at 66.00$, 65.30$ and 64.00$.
Last week the price failed to hold on to 68.00$ due to profit booking. Hedge funds increase long bets according to the U.S Commodity Futures Trading Commission and the U.S oil rig count falls to lowest level since April 2018 according to Baker Hughes should support the crude oil price in the near term.
On top of these the crude oil broadly well supported by supply cuts led by US sanctions against Venezuela and supply cuts by OPEC.
Saudi signals OPEC may need to extend oil cuts until end-2019, Reuters said in a note. “Saudi Arabia said on Sunday OPEC’s job in rebalancing the oil market was far from done as global inventories were still rising despite harsh U.S. sanctions on Iran and Venezuela, signalling it may need to expand output cuts into the second half of 2019.”.
In its latest Oil Market report IEA said: “On the basis of solid oil demand growth, modest declines in OPEC production due to Iran and Venezuela, and rising US output, the market could show a modest surplus in 1Q19, before flipping into deficit in 2Q19 by about 0.5 mb/d”.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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