Crude oil price is trading higher as the market reacts to Friday’s cyberattack on the Colonial Pipeline system. Colonial Pipeline operates the largest pipeline system in the US; delivering about 45% of the fuel used in East Coast. Brent futures are trading along $69, up from last week’s low of $67.41. WTI futures are also up by 0.63% at $65.31. A prolonged shutdown is likely to have a significant impact on gasoline prices.
Investors are also focused on Tuesday’s EIA’s short-term energy outlook (STEO) and the OPEC monthly report. In April’s STEO, EIA forecasted that Brent prices will trade at an average of $65 in Q2’21 and $61 in the year’s second half. OPEC’s report comes at a time when the coalition is set to increase oil production by over 2 million bpd between May and July.
Brent Futures Technical Outlook
Crude oil price is trading higher as the bulls in the market seek to retest the one-and-a-half month high of $69.94 hit last week. At the time of writing, brent futures were up by 0.85% at $68.78. On a four-hour chart, it is trading above the 25 and 50-day exponential moving averages. Furthermore, the formation of an ascending channel signals additional gains.
Crude oil price is likely to find support along the 25-day EMA at around $68.41. After trading at its current resistance level at $69, I expect it to surge past last week’s high to hit $70. That will be its highest level since mid-March. However, this thesis will be invalidated by a move below $67.74.