Brent crude oil had a significant strong week last week, closed at $61.30 tad above 200WMA.
The erosion of important technical thresholds at $59.90 and the $60.40 is highly encouraging, whereas the overbought RSI and the bearish turnaround of the daily oscillator should cap the rallies in the coming days. Against this backdrop, a lasting break of the $62 barrier sounds tricky, and we rather fear a decline to supports at $60.50. Note that a break below this level would underpin bearish momentum, paving the way for a decline to $59.90 and even $58.00 levels.
The resistances stand at $62.00, a decisive breakout above this could all the price to outperform towards the 200MAs spread between $63.50-64.00$ levels.
As we highlighted last week, the price runs through the two targets we set. Last week’s key resistance is acting as a pivotal this week. Oil traders are waiting for fresh clues as global growth in stake.
Platts cited that “IMF cuts Gulf countries countries’ growth forecasts on OPEC+ cuts.” In the recent article, Platts said “The gross domestic product of six Gulf countries — Saudi Arabia, Kuwait, the UAE, Qatar, Oman, and Bahrain — will grow 0.7% in 2019, down from 2% growth recorded in 2018, the fund said in a report published on Monday. This was further lower from a previous 2019 growth forecast of 2.1%, which IMF projected in April.”
Turning to the rig count, Drillers cut 17 oil rigs in the week to Oct. 25, bringing the total count down to 696, the lowest since April 2017, General Electric Co’sCo’s Baker Hughes energy services firm said in its closely followed report on Friday, reported by Reuters.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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