Separately, there are increasing evidences of major disruptions to crude supply from Iran and Venezuela as well as from Libya and Angola. The IEA (International Energy Agency) has already issued warnings of a tightening oil market towards the later part of the year, due to declining supplies from countries like Iran and Venezuela, and stronger demand from Asia.
In this mayhem, will the crude prices cool off?
Let’s analyze what the technical charts are indicating:
First glimpse of the daily chart indicates the surge – 10% rise in 2 weeks. The momentum indicators are gradually getting into the overbought territory. There is a trendline resistance (blue line) around 78.50-79.00. Levels around 80.50 were resisted twice in May 2018. Ranges of 79.50-79.70 were reattempted twice in end June-early July 2018 – it resisted on both occasions.
Technically, there are good resistances around 79.50 – 80.50.
My sense is that supply concerns in crude might persist – OPEC and Non-OPEC on one side and the Western Nations (US and Europe) on the other do not share much of bonhomie. I feel Brent might rise a bit more but resistance around 80-81 will hold.
If Brent breaks above 80.50-60 a forms a fresh peak, the above judgement will be invalidated.
Date : Aug-2018
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