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Crude Oil Price Analysis: Crucial Resistance Breached, Return to $80?

Crude Oil Price Analysis: Crucial Resistance Breached, Return to $80?

Justin McQueen,

Oil Price Analysis and News

  • Crucial Resistance Breached at Last
  • Market Structure Provides Optimism for Brent Crude Bulls

For a more in-depth analysis on Oil Prices, check out the Q3 Forecast for Oil

Crucial Resistance Breached at Last

As volumes pick up with US market participants returning from their elongated break. Brent crude futures has made a breach through key resistance in the form of the descending trendline from the YTD peak. Previously, this had curbed the uptrend in Brent crude prices, however, today has finally seen a breach. For a confirmation that the bullish trend is intact, a daily close above the descending trendline ($78.50) is needed.

Oil Price Chart: Daily Time Frame (March-September 2018)

Source: Thomson Reuters

Market Structure Provides Optimism for Brent Crude Bulls

Good news for those who are bullish on Brent crude prices. The futures curve is in backwardation of around $0.25. This is an important development given that the positive monthly roll from the backwardation market structure could entice speculators to assume bullish bets, consequently helping lift the spot price. As such, this increases the likelihood that Brent prices may well see a return to the $80 mark.

Brent Crude 1-Month Forward Curve

Source: Thomson Reuters

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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