Sep 14, 2020, 9:28:42 AM

Brent Crude Oil: correction after falling

Current trend

Oil prices have stopped falling and are trading around $39 per barrel this week.

The instrument is consolidating within a narrow price range. The weekly data on crude oil inventories from the API and EIA reflected a reduced seasonal demand for oil products. According to the API Institute, inventories increased by 2.970 million compared with a decrease of –6.360 million a week earlier, and according to the EIA Department of Energy, the rise in reserves amounted to 2.032 million barrels, which exceeded analysts' expectations, which had expected a fall of –1.335 million. Surplus energy reserves grew in the storage facilities of Cushing, increasing by 1.838 million barrels, which is a significant increase with an average weekly dynamics of changes of 200–300K barrels.

Support and resistance

Quotes move within the global ascending channel and are near the support line, correcting after the downward wave around ​​the 38.2% Fibonacci base correction level. The likelihood of continued decline is quite high, as indicated by technical indicators. The range of EMA fluctuations on the Alligator indicator began to expand downwards, and the histogram of the AO oscillator moved into the negative zone.

Resistance levels: 40.00, 45.00.

Support levels: 39.00, 31.20.

Trading tips

After decline or consolidation below the local minimum at 39.00, it is relevant to open sell positions with the target at 31.20. Stop loss is 40.00, above the local low.

After a reversal and growth or consolidation above 40.00, buy positions with the target at 45.00 will be relevant. Stop loss should be set at 39.00, below the local minimum.

Implementation period: 7 days or more.