Crude Oil Price Hits 10-Week High, Resistance Nears
Brent Oil and US Crude Oil Prices and Charts:
- Bumper US labour data fuels the recent rally.
- Venezuela sanctions crimp supply.
Crude Oil Testing a Multi-Month High
Oil closed the week on the front foot after a strong US labour report helped underpin the recent rally while US-imposed sanctions on Venezuela cut supply to a market already hit by falling OPEC production. The combination of better-than-expected economic data and reduced supply sent crude oil to a peak of $63.38/bbl. a level last seen 10-weeks ago. The market is currently taking weak Chinese growth in its stride, although this week there will be no data or economic news as the country closes for a week-long celebration of Chinese New Year.
Crude oil recently took out resistance at $60.63/bbl. and is now using this level as short-term support. The next important resistance level is around $2/bbl. higher at $65.59/bbl. the 50% retracement of the June 2017 – October 2018 rally. This level should hold firm in the short-term, although the medium-term outlook for crude remains positive with the combination of the 200-day dma at $70.70/bbl. and the 38.2% Fibonacci resistance at $70.56/bbl. the next level to highlight.
Brent Crude Oil Daily Price Chart (March - February 4, 2019)
IG Retail Sentiment data show that traders are 64.1% net-long US crude oil – a bearish contrarian set-up – but a combination of daily and weekly sentiment shifts suggests that prices may continue to move higher.
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