Crude oil prices rose more than 2% initially on the day, after new attacks on Saudi Aramco facilities by Yemenese Houthi rebels. Houthi rebels said they targeted Saudi Aramco sites with missile strikes, in what is now the third of such incidents in 2 years.
Also adding to the bullish sentiment on the day is the market optimism that followed reports of the US hitting 22% coverage in coronavirus vaccinations.
Rising fuel demand in the US is an additional factor creating bullish pressure on the price of the Brent crude benchmark. However, gains in crude oil prices remain capped below $65. However, an increase in coronavirus caseloads in Asia could stifle demand from that angle.
As of the time of writing, Brent crude had given up a lot of the day’s gains and now trades 0.38% higher.
Technical Outlook for Brent Crude
Today’s upside move comes off a bounce on the lower edge of the bearish flag pattern, as crude oil price continues to consolidate within the pattern. This move met resistance at the 64.26 price level, with a slight pullback. Price needs to break this resistance to target the 65.95 barrier and the 67.74 resistance that intersects the flag’s upper boundary. Here, the crude oil price is expected to face rejection, allowing it to make another charge towards the flag’s lower border to attempt a breakdown of the pattern.
A successful breakdown of the flag is the expected outcome, with price targeting the 57.47 price mark as the measured move’s projected price target. This move has to take out 62.21 and 60.07 to be actualized.
On the other hand, if the price can escape the upper edge of the flag, this would invalidate the pattern and open the gates for the bulls to aim for 70.01. Ahead of this price level, 71.44 remains 2021’s high; it needs to be cleared with a higher high to re-establish the recovery of crude oil prices. If the higher high is achieved, 73.34 becomes the natural target for bulls.
Brent Crude; Daily Chart
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