Brent Crude Oil Price Falters at $80, Downside Back In Focus
Crude oil price analysis and talking points:
- From a technical viewpoint too, the price of Brent crude looks ready to slip back after reaching its highest levels since November 2014.
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Brent crude oil price under pressure
The price of Brent crude oil, the global benchmark outside the US, has now failed twice in recent days to break convincingly above the $80 per barrel level, suggesting that the market is now toppish and ready for at least a modest move lower.
As the daily chart below shows, the price remains within a rising channel in place since mid-April but a slide towards the channel support line seems possible after those two successive failed attempts to top $80, which is seen as an important level psychologically.
Brent Crude Oil Price Chart, Daily Timeframe (Year to Date)
The failure just below $80.50 can be seen more clearly on the hourly chart below, where the pattern looks like a badly-formed double top. Currently, the price is sitting right on the neckline and a break under it could be the trigger that begins a drop down towards the main support line, currently at $76.45. Conversely, a climb above $80.50 would negate this bearish outlook.
Brent Crude Oil Price Chart, Hourly Timeframe (May 15 – 24, 2018)
A fall back in the price of Brent crude would be no surprise to fundamental analysts. US crude oil stockpiles are rising, with inventories climbing unexpectedly last week as net imports jumped, the US Energy Information Administration reported Wednesday. There have also been reports that members of the Organization of the Petroleum Exporting Countries along with allies such as Russia, known as OPEC+, will discuss easing their output cap at a meeting in Vienna on June 22.
However, it is also possible that supplies from both Iran and Venezuela will be disrupted by US sanctions.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.