Crude oil prices pulled back to the $54.50 mark, just below the 18 January low. However, bulls have come in to reject the downward push, manifesting as a price bounce.
According to data released by the Energy Information Administration, crude oil inventories for the week ended January 15 rose by 4.4 million barrels. This is a huge jump in stockpiles as a market that predicted that there will be a shortage of 1.2 million barrels. The figure is also far above that of the previous week which had registered we should follow 3.2 million barrels.
Helping to drive down Brent crude today are the new lockdowns implemented in Beijing as a response to growing coronavirus cases across China and the globe. Vaccine optimism is also waning; demand for vaccines has outstripped the capacity of the companies currently producing them to meet the demand.
Crude oil price on the Brent crude benchmark is down 0.91% as of the time of writing.
Price Levels to Watch for in Brent Crude
The ascending trendline support line which connects multiple loads dating back to October 2020 continues to act as crucial price support. the active daily candle post on this area to reaffirm the strength of this line as a key support line. However, the breakdown of the ascending support Redline opens the door to Wards the nearest Downside target at 53.99. a further decline takes crude oil price to Ward 52.38, with the 50.64 price level also lining up as a potential downside target.
On the other hand, if the buyers are able to pick up from the bullish bounce in the daily candle, it may be possible for them to attain the 56.47 resistance target. A break of this target point allows 57.47 to come to the picture. A re-establishment of the recovery in crude oil price comes from who’s pushing price beyond 57.47.
If the price features a rejection and pullback at 57.47, a downside move turns the pattern into an evolving double top, with neckline located order at 54.50 of 53.99. If price breaks below the neckline points, the double top is confirmed.
Brent Crude; Daily Chart