Current trend

During the Asian session, prices for Brent Crude Oil fell slightly, remaining close to 77.80 amid reduced activity in the market, as American markets were closed on Monday due to Martin Luther King’s Birthday celebration.

The quotes are supported by the risks of further escalation of the conflict in the Middle East. Thus, last weekend, the US and UK launched a new strike on Yemen in response to a series of Houthi attacks on ships in the Red Sea, followed by a rocket attack on a military base and US consulate in Iraq, so maritime navigation in the region is still difficult and negatively affecting on the dynamics of oil supply.

Investors paid attention to the news about the launch of Africa’s largest oil refinery in Nigeria, Dangote Petroleum Refinery, with a design capacity of about 650.0K barrels per day, part of the production of which can be exported, increasing the total oil supply on the market.

On Wednesday, the US will release the US Federal Reserve’s monthly Beige Book economic review and December retail sales data, which may grow from 0.3% to 0.4%, while OPEC will present its monthly oil market report.

Support and resistance

On the daily chart, Bollinger Bands are moving moderately lower as the price range narrows, reflecting ambiguous trading in the short term. The MACD indicator tries to reverse into a downward plane, maintaining a buy signal (the histogram is above the signal line). Stochastic shows similar dynamics in the center of the working area.

Resistance levels: 78.00, 79.12, 80.00, 81.00.

Support levels: 77.00, 76.05, 75.04, 74.00.

Trading tips

Long positions may be opened after 78.00 is broken upwards with the target at 80.00. Stop loss – 77.00. Implementation time: 2–3 days.

Short positions may be opened after a rebound from the resistance level of 78.00 and a breakdown of 77.00 with the target at 75.04. Stop loss – 78.00.