A Crude Awakening
Brent Crude (UKOIL) is a blend of different oil sourced from the North Sea. This blend is popular in gasoline production and used to price nearly two thirds of the world’s oil supply. Brent has been on a surge with the continued commodity boom and also benefited from increased international demand.
Brent looks poised to continue its bull run if political and civil unrest continues across the globe. Continued conflict in Libya and unrest elsewhere could prove a direct detriment to the world supply of oil. With demand for oil unwavering, any limit of supply could send prices exponentially higher.
Taking price in to a 4hr chart, we can see Brent Oil charging higher along our trend line established back on January 25th at $94.73 a barrel. Price has come off its latest high of $126.96 and given us opportunity to look for fresh entry opportunities along the trend. Sellers of oil are looking for a break in the trend and for price to drop below the previous low of $113.53 established on March 29th.
Our strong uptrend gives us the ability to look for fresh buy orders on Brent (UKOIL). My preference is to buy a bounce off our trend line near $116.50 - $117.50 a barrel. Stops should be placed to limit downward exposure if price breaks below the previous low of $113.53. A 1:2 Risk – Reward ratio sets our sights on $120.00 a barrel or higher depending on our final entry point.
Alternative scenarios include watching for price to break early due to global events. Entry orders to buy a break higher may be placed above $123.99 our April 15th high.
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