Crude oil price on the Brent benchmark shot up to 1-week highs after fears that additional crude oil supply from Iran could create a supply glut faded. Brent crude saw some dip-buying, and this situation enabled crude oil prices to push off intraday lows at a critical support level on Tuesday.
Also helping to prop up prices was a weaker US Dollar, which continues to be on the back foot as one Fed official after another chip away at the last CPI data and its projected impact on QE tapering.
The fifth round of talks between the United States and Iran resumed in Vienna this Tuesday. However, an agreement is yet to be reached on several fronts, which could delay the re-entry of Iranian oil exports into the global supply chain. Concerns over the uptick of coronavirus cases in Asia remain the fundamental factor that could cap price rallies.
Technical levels to Watch
The expected breakdown of the bearish flag has not materialized, as a V-shaped recovery move truncated the push towards 60.07. With price firmly back within the channel, bulls seek to build on today’s support bounce at 67.74 to make a run for the 70.01 psychological resistance. A further advance brings 71.44 into the picture before the channel’s upper border appears as an additional barrier before 73.34.
On the flip side, a collapse of the price below 67.74 has leeway to approach 66.81, with 65.95 and 64.26 standing as additional downside barriers before 62.21 and 60.07 come into focus.