BRENT CRUDE OIL: PROBLEMS WITH SHIPPING IN THE RED SEA ARE A DRIVER OF RISING OIL PRICES
| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | BUY STOP |
| Entry Point | 83.10 |
| Take Profit | 87.00 |
| Stop Loss | 81.00 |
| Key Levels | 78.30, 81.40, 83.10, 87.00 |
| Alternative scenario | |
|---|---|
| Recommendation | SELL STOP |
| Entry Point | 81.40 |
| Take Profit | 78.30 |
| Stop Loss | 83.00 |
| Key Levels | 78.30, 81.40, 83.10, 87.00 |
Current trend
Prices for benchmark Brent Crude Oil are trading at 82.00.
The upward correction, which has been going on for the third month, is largely the market’s reaction to problems with supplies through the Red Sea. So, yesterday, the US Central Command announced that the Yemeni Houthis made another attempt to attack the American ship Torm Thor but did not achieve their goal. Many companies have already abandoned transporting oil through this water area and are choosing longer and more expensive bypass routes. In this regard, Bloomberg analysts reported that the oil transportation by large agents has decreased to a low in the last 40 years, and more tankers are needed to maintain the required level but only two vessels are being prepared for launch in 2024, which is below the historical average years by 90.0%, and in 2025 – five, is not enough to meet current demand.
As for the local dynamics of quotations, investors’ attention is drawn to the weekly reports on oil reserves: today, the American Petroleum Institute (API) reported an increase in the indicator from 7.168M barrels to 8.428M barrels. At 17:30 (GMT 2), statistics from the US Department of Energy’s Energy Information Administration (EIA) will be published, which is expected to reflect an increase of 3.100M barrels from 3.514M barrels previously.
Support and resistance
On the daily chart, the trading instrument is moving in a global corrective trend, approaching the resistance line of the local Triangle pattern of 83.40–78.00, and is preparing to continue growing.
Technical indicators support a buy signal: fast EMAs of the Alligator indicator are above the signal line, and the AO histogram forms ascending bars in the buy zone.
Resistance levels: 83.10, 87.00.
Support levels: 81.40, 78.30.
Trading tips
Long positions may be opened after the consolidation above 83.10, with the target at 87.00. Stop loss – 81.00. Implementation period: 7 days or more.
Short positions may be opened after the consolidation below 81.40, with the target at 78.30. Stop loss – 83.00.
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