We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The $AUD has risen in anticipation of a deal Washington and Beijing. But the Australia-China trade relationship has not suffered much and may even have been helped by China’s spat with the US. Get your market update from @DavidCottleFX here:https://t.co/An7h5X0Zcz https://t.co/Rn7mLbS1EF
  • How can traders avoid #FOMO in trading? Start by implementing a well-heeled plan taking only four hours per week. Get your insight from @JStanleyFX here: https://t.co/vwUShQPc27 #tradingstyle https://t.co/0Wn4xBL0AY
  • Do you know which type of stock is the right investment for you? Stock types help investors decide on specific #stocks to trade or assist with valuation methods either fundamentally or technically. Learn more about stock types here: https://t.co/yO3JalkqUU https://t.co/RoNdExHAdt
  • The status of the US #dollar as the safe-haven asset of choice remains untouched and any weakness in the greenback is likely to be short-lived. Get your $USD market update from @nickcawley1 here: https://t.co/LO2u38jpUT https://t.co/ctgCJSOeTH
  • #FTSE 100 testing key support as the index lacks a directional bias. #DAX reverses off channel top. Get your indices technical analysis from @JMcQueenFX here: https://t.co/IHF2dgMfg9 https://t.co/2fMTFlOeTR
  • With knowledge of price action, traders can perform a wide range of technical analysis functions without the necessity of any indicators, including management of risk. Build on you knowledge of price action here: https://t.co/9hQA0bsYtt https://t.co/5KQowxuiBf
  • The term ‘Ichimoku,’ literally means ‘one glance,’ in Japanese. Ichimoku, or the one glance indicator, is considered to be a self-contained system in the fact that no additional indicators are necessary. Learn more about the 'one glance' indicator here: https://t.co/T7o7W9C0Ro https://t.co/7bhBfWvEkR
  • Support and resistance are the cornerstone of technical analysis, making it the foundation that you build your knowledge on. Build a stronger foundation here: https://t.co/yXLaRpl90I https://t.co/85JHunf2Xf
  • Many traders ask how a trading method that is 77 years old is applicable today. Learn about the Gartley pattern and see how you can incorporate it into your trading style here: https://t.co/2yPmGH0XvT https://t.co/rtqUKZSdn1
  • Recessions can devastate the economy and disrupt the fortunes of individuals, businesses, and investors. But economic decline in the business cycle is inevitable, and your trading can be defined by how you respond to crisis. learn how to prepare here: https://t.co/e4CnobJCss https://t.co/ywv7RVP9qY
Brent Crude Oil Jumps Again As Lower-For-Longer View Is Dying

Brent Crude Oil Jumps Again As Lower-For-Longer View Is Dying

2018-05-22 15:00:00
Tyler Yell, CMT, Currency Strategist

Brent Crude Oil Price Forecast Talking Points:

  • The ONE Thing: Brent maintains strong factors support a bullish trend with favorable momentum being maintained. Brent recently surpassed the price level of November 2014 when OPEC said production curbs were not necessary. Now, the production is low as planned but dropped more than expected due to high compliance of production curbs alongside a drastic production drop from petrostates like Venezuela. Trump’s abandonment of the JCPOA also is reducing market supply.
  • The back end of the forward's curve, bets on price at different time points, continues to rise showing that the lower-for-longer view is dying out.
  • Brent Crude Oil Technical Analysis Strategy: Uptrends are naturally overbought, and momentum remains bullish.An inability to close below the 26-day midpoint shows the trend remains in force as prices just broke above a key level on the long-term chart.
  • Access our recent Crude Oil Fundamental Forecast here

Crude has multiple strong factors lifting prices higher with options actions showing bets for extreme appreciation like $135-$200/bbl. While demand has been consistently higher, the main focus has been on the sharp drop in OPEC output alongside the view that oil may be moving into a new bullish cycle that eliminates the lower-for-longer view that was held for much of 2015-2016.

Bullish Momentum Aided By Dwindling Venezuelan Production

Most of the OPEC output drop has been planned thanks to OPEC+ production cuts. However, the shock value that has added a demand premium as expected supply is vanishing comes from the recent sanctions on Iran and Venezuela. The Venezuelan sanctions were recently applied by US President Trump who ordered sanctions on debt owed to Venezuela’s government after the weekend’s election drew ire from the international community.

Please add a description for the image.

Data source: OPEC, Bloomberg

Unlock our Q2 18 forecast to learn what will drive trends for Crude Oil in a volatile Q2

The drop in Venezuelan supply is easily visible as supporting the move higher in Brent. However, the excess capacity that OPEC has to put a ceiling on prices should they remove the curves early is a constant concern for many bulls.

A quick history lesson will show you that OPEC’s track record is less than perfect of being willing to cap rising prices as the revenue gaps are filled much quicker despite pain felt elsewhere. If something were to pull OPEC out of the production curbs earlier than expected to put a ceiling on prices, it would likely be lost market share to the North American producers. Most notably, the recent headline about the ‘cease-fire’ in the trade war was aligned with China’s commitment to buy more energy from the US.

Bye-Bye, Lower-For-Longer

Please add a description for the image.

Data source: Bloomberg

The futures curve is a tool that speculators and hedgers or corporates alike look to as the perceived fair value of an asset at different points in time due to the available information. The back of the curve is often a helpful source of information about sentiment and perceived effects of current policies.

The back of the curve lately is rising, and that likely is making OPEC+ feel very good about their recent success despite the drop in production from Venezuela and Angola and the sanctions on Iran and Venezuela.

In addition to soaring prices, scarcity in the market has seen the long-dated oil prices jump toward $70. While the back-end of a futures curve is volatile, it’s a good way to see that fears of ‘lower-for-longer’ or dying.

Technical View: Weekly Charts Shows Bullish Momentum, $90/bbl Target

Please add a description for the image.

Chart Source: Pro Real Time with IG UK Price Feed. Created by Tyler Yell, CMT


Resistance:$83.02 / $90 (61.8% Extension From 2017 Rally, 61.8% Retracement of 2012/16 Range)

Spot: $80.32

Support:$79.61/ $76.39 (Weekly low, 26-day midpoint)

The only complaint bulls likely have about Brent is that the trend has been too strong to help identify re-entry points. Monday’s price action saw the pair briefly drop before rising again and is currently set to close at the highest level in three years.

The focal point of support comes from the weekly low at $79.61 and the 26-period midpoint at $76.36. The 26-day midpoint is a crucial component of the Ichimoku Cloud indicator that you see on the chart above. A hold above these levels on a closing basis shows us that falling production will continue to lift crude.

Not familiar with Ichimoku? You’re not alone, and you’re in luck. I created a free guide for you here

New to FX trading? No worries, we created this guide just for you.


Are you looking for longer-term analysis on Crude Oil and other popular markets? Our DailyFX Forecasts for Q2 have a section for each primary currency, and we also offer an excess of resources on USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our popular and free IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers a surplus of helpful trading tools, indicators, and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions.

Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities, and our real-time news feedhas intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.

If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.

---Written by Tyler Yell, CMT

Tyler Yell is a Chartered Market Technician. Tyler provides Technical analysis that is powered by fundamental factors on key markets as well as t1rading educational resources. Read more of Tyler’s Technical reports via his bio page.

Communicate with Tyler and have your shout below by posting in the comments area. Feel free to include your market views as well.

Discuss this market with Tyler in the live webinar, FX Closing Bell, Weekdays Monday-Thursday at 3 pm ET.

Talk markets on twitter @ForexYell

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


News & Analysis at your fingertips.