Brent crude oil price rebounds today after five consecutive trading sessions of losses that drove the oil price from the five-month highs to the lowest level since June 16. I have written about the bearish momentum in the previous article: Brent Crude Oil Price Retreat As Bears Show Teeth.
The risk-off sentiment is the main factor of the sharp correction, while the sell-off in big tech companies also weighs on sentiment. Fears that the demand for crude oil is far away from the pre-coronavirus levels and a slow-down in the economic recovery is also pressure the crude oil price.
Brent Crude oil price has lost over 13% in the last eight trading days amid concerns that the rebound in oil demand has weakened as the data showed for the consumption of oil products in the U.S. has stalled in August. Meanwhile, the oil production is coming back after the OPEC+ oil production cuts and the recovery in the oil production in the Gulf of Mexico.
Saudi Arabia Cut Oil prices for October Shipments
Further pressure to crude oil price came from Saudi Arabia, which announced that it is cutting oil prices for October shipments to Asian and U.S. clients.
Brent Oil Technical Analysis
Brent crude oil price started the session higher and managed to return above the 40 mark, adding 1.15% to 40.29. The last time when the oil price was below the 40 mark was on June 25.
The recent correction from the five-month highs, which started the previous week accelerated after the price breached below the 50-day moving average. The sharp correction which drove the crude oil price to the oversold area, stalled yesterday at the 100-day moving average support, sending a buying signal. Resistance for crude oil price stands at 40.47 the daily top. More sellers would emerge at $42.19 the high from yesterday’s trading session.
On the contrary, support is at 39.30 area where the 100-day moving average crosses and is also the daily low. Below that level, the next resistance stands at 37.23 the low from June 15.
Brent Crude Oil Daily Chart