Brent Crude Oil (UKOIL) price turned red for the third consecutive day on Friday. The futures contracts for black gold were changing hands at $77.26 during the New York session of the year’s last trading day.
The global oil prices are set to close the first year since 2020 at a loss. On a yearly timeframe, the British benchmark is down 10.13%. The price action can be linked to improved global supply and lesser-than-expected recovery in demand from major economies like China.
The negative Brent crude price action is surprising for some traders as the US Energy Information Administration reported a decline of 6.9 million barrels for the week till December 22. The prices turned green initially but the increased selling pressure pushed it to fresh weekly lows.
Technical analysis further reveals the reason behind the recent weakness in Brent crude oil price. The price broke above the downtrend line earlier this week as shown in the following chart. However, this turned out to be a fakeout as the bulls couldn’t gain any momentum.
Consequently, oil prices are down 2% and 3.9% on the weekly and monthly timeframes, respectively. The most likely scenario appears to be a move toward the next support level of $71.50 to capture the sell side liquidity.
