Crude oil price on both the West Texas Intermediate (WTI) and Brent crude benchmarks are on the verge of a breakout as oil prices respond to the closure of platforms on the Gulf Coast ahead of tropical storm Laura. Laura is expected to strengthen significantly into a hurricane just before it makes landfall in Texas. As a result, oil drilling platforms in the Gulf Coast have evacuated ahead of the storm’s arrival, which has reigned in more than a million barrels of crude oil per day’s worth of production.
Hurricane Marco is now a tropical storm after making landfall on Sunday, but Laura is expected to be a larger storm, with projections of it strengthening into a Category 3 hurricane this week.
Crude oil price is currently trading at 45.90 or 1.95% higher on the day.
Technical Outlook for Crude Oil Price
The daily chart on the Brent crude chart shows the rectangle pattern on the chart, as well as today’s breakout candle. Brent crude needs two successive daily closing penetrations above the 5 August candle’s high to establish the upside breakout. This would then set up a possible move to the 48.33 resistance target, with 50.64 lining up as a further target to the north.
On the flip side, restoration of production, less damage from the hurricane than initially feared, or higher-than-expected crude inventory numbers tomorrow are all factors which may allow price to enter into a downward trajectory. This move tests 45.39 initially, with 44.16 and 41.13 constituting downside targets.