Brent crude oil remains on the defensive, lost nearly 8% in Q3. Overnight oil price was down by 3.50% on Saudi Arabia output recovery and Monday’s weak Chinese data. Experts see the price may not see any sharp upmove until supply concerns back on the table.

The price fully retraced back to pre-drone attack levels/mid-September low; now, we are focusing on $58.20 its 200MA (Weekly). 

HSBC reported, “Output from Saudi Arabia has rebounded to more than 8mbd, yet is still around 1.5mbd below levels before the oil installation attacks earlier in September.” And also cited, “The oil futures curve remains in backwardation.”

Moody’s Analytics said “Brent crude oil averages US$66.82 per barrel in the December quarter and US$65.40 per barrel in 2020. In the oil price shock scenario, Brent rises to US$68.09 per barrel in the December quarter and US$71.22 per barrel in 2020.”

S&P Platts reported “The president and CEO of Aramco Trading Co., Ibrahim al-Buainain, said Monday Saudi Arabia had restored its oil production to more than 9.9 million b/d.

Buainain said, “not one single shipment” to any of Aramco’s customers were missed or canceled as a result of the attack, proving how resilient Saudi oil infrastructure is.”

According to the bar chart, the price was capped at $61.85 levels. The pivotal import level, which will act as crucial support, is placed at $58.40 earlier swing low followed by $58.20 its 200MA (Weekly). A move below these support level could open towards $57.80 and $57.00 levels.

Flipside, key resistance levels are placed at $60.50 and $61.70. The daily indicators are also not supporting oil prices.

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

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