Technicals – Brent Oil May Rise To $45.09
Reprinted from Reuters 24/08/2020
SINGAPORE, Aug 24 (Reuters) – Brent oil may rise to $45.09 per barrel, as it may have completed a correction from the Aug. 5 high of $46.23.
The correction consists of three waves. The third wave labeled (c) is equal to the first wave labeled (a), as revealed by a projection analysis.
Such equality, along with the bounce from the Aug. 21 low of $43.59, works as a convincing signal that the correction is over.
The projection analysis also reveals a target of $45.09, the 23.6% level. Support is at $44.34, a break below which could cause a fall into $43.59-$44.05 range.
On the daily chart, any further correction could be a most likely end in a strong support zone of $42.89-$43.86 formed by the 38.2% retracement on the downtrend from $86.43 to $15.98 and the 50% retracement on the downtrend from $71.75 to $15.98.
Only a fall below $42.89 could signal a reversal of the uptrend. A bearish target of $37.28 will be established then.
Oil edges up as storms take aim at the Gulf of Mexico
- Storms head for the Gulf of Mexico, force evacuations
- OPEC+ needs to offset large May-July oversupply -document
- Global coronavirus deaths exceed 800,000
SINGAPORE, Aug 24 (Reuters) – Crude oil prices nudged higher on Monday as storms bore down on the Gulf of Mexico, shutting more than half the region’s oil production, although gains were capped by ongoing concerns about demand from coronavirus lockdowns.
Hurricane Marco and Tropical Storm Laura tore through the Caribbean and Gulf of Mexico on Sunday, forcing energy companies to pull workers from offshore platforms and shut down oil production.
Oil producers had shut 58% of the Gulf’s offshore oil production and 45% of natural gas production on Sunday. The region accounts for 17% of total U.S. oil production and 5% of U.S. natural gas output.
Brent crude oil futures added 8 cents, or 0.2%, to $44.43 a barrel by 0040 GMT while U.S. West Texas Intermediate crude was up 7 cents, or 0.2%, to $42.41 a barrel.
Both benchmark contracts fell about 1% on Friday on economic concerns and rising crude supply.
“Crude prices rose higher as double trouble in the Atlantic could lead to huge disruptions with oil operations in the Gulf of Mexico,” said Edward Moya, senior market analyst at OANDA in New York.
“Oil’s gains, however, are likely to be muted as virus uncertainty continues to weigh on the crude demand outlook.” The global death toll from the coronavirus surpassed 800,000 on Saturday, according to a Reuters tally, with the United States, Brazil, and India leading the rise in fatalities.
Also supporting prices was a report by members of the Organization of the Petroleum Exporting Countries and other oil powers including Russia, that oil-producing countries in the OPEC+ group that pumped above supply targets from May to July will need to slash output by over a million barrels per day for two months to compensate.