Brent Crude Oil Calm Ahead of US Oil Rig Count Data
As expected, crude oil price action has seen its upside move on Wednesday peter out, as the situation in Lebanon becomes clearer. Crude oil prices had spiked on Wednesday morning, a few hours after the massive bomb blast in Lebanon that at first glance, appeared to be the work of terrorists. In my crude oil review of yesterday, I had indicated that this perception was what was responsible for the uptick in crude oil prices, which had been capped below $44 for nearly two months. I had also indicated that it was likely that prices would be curtailed as the Lebanese government had suggested that the source of the explosion was an ammonium nitrate storage depot close to the port. This outlook appears to have gained affirmation, as crude oil prices have not only retreated but seem to have run out of steam altogether.
Crude oil price on the Brent crude benchmark is currently trading at $45.40, which is a gain of about 0.22% on the day.
Technical Outlook for Brent Crude
Brent crude price action appears muted on the day, with a high on the day’s candle, which is lower than yesterday’s candle. The current price levels correspond to the lows of the 6 March candle, just before the bearish gap. This price represents an area of resistance. If crude oil price can break above the resistance at the 45.39 price level, then the door will be open for the price to target the 48.33 resistance with the 50.64 price level not too far away.
On the flip side, failure to reach the current resistance level could allow for a pullback with the 44.16 price level now acting as a support. Further support levels are presented at the 41.43 and 38.56 price levels. Tomorrow’s non-farm payrolls report could be critical in deciding how crude oil price action moves, with particular emphasis on the US dollar’s response to the NFP.