Not just the Indian stock markets, but the major and most talked about commodity Brent crude too witnessed a correction at the start of October 2018, which continues till date. Prices have corrected, making lower tops and lower bottoms from the 2018 top of $86.74 made on October 3 towards currently at $77.55.
Despite fear of Iran sanctions which are due next month and possible retaliation from Saudi Arabia of its journalist’s murder, Brent oil prices have seen correction, posting third weekly loss, including today’s session. This was in the wake of Saudi Arabia warning of oversupply. Further, the slackness in equity markets across the globe and the trade war concerns weakened the outlook for the fuel demand in future.
Technically, Brent Oil prices has been following within the upward sloping parallel channel pattern in weekly timeframe chart as shown. The recent rally was seen restricted at the upper end followed by corrective move towards the lower end of pattern as support. Despite of the move higher above the previous set of highs, Momentum has been restricted around 50-70 zone. This brings cautiousness towards long position as momentum fails to show the bullish structure. The previous set of highs at around $83-84 will act as intermediate resistance while break below $75 level will show extension of correction. Thus, Brent Crude Prices are trading near its crucial support levels and breaking below will shows sharp move downwards.
Globally, Brent Oil:
- Forecasters have also been tempering their outlook for growth in global oil consumption due to trade tensions, high oil prices and currency weakness in some emerging markets.
- Hedge funds and money managers are now liquidating their long positions in oil, or bets that the commodity price will keep rising.
- On the supply side, Iran has started selling crude to private companies via a domestic exchange for the first time, the Oil Ministry’s news website reported.