Crude oil prices resumed the push above the channel’s upper border, following yesterday’s loss. Pfizer’s announcement that it would apply for emergency use approval in the coming days is one of the factors that boosted risky sentiment this Wednesday.
Further supporting crude oil prices was the proposal by OPEC + members to suspend the lifting of curbs in crude oil production by another three months. This news was potentiated by the shrinking of crude oil inventories in data announced by the US Energy Information Administration (EIA). Crude oil inventories in the United States shrank to a stockpile of 800,000 barrels in the week ended 13 November. This number was less than last week’s stock surplus of 4.3million barrels and was also less than the 1.7million barrels addition that the markets were expecting.
Though volumes remain muted among crude oil price on the Brent crude benchmark and several risky assets, the fundamentals on the day were enough to support crude oil prices.
Technical Levels to Watch
Today’s upside move is now challenging the resistance at the 44.16 price level. Two successive daily closing penetrations above this level are needed to confirm the breakout. If the breakout is affirmed, then we could see a price push towards 46.41 in the first instance. However, there must be significant buying pressure to force this to happen. So far, price momentum on the bullish side continues to remain weak.
On the other hand, failure to break above 44.16 allows for a possible pullback from current levels, targeting 42.50 and possibly 41.43, in that order. The 200-day moving average provides additional support at the 39.57 support line (15 September and 9 November lows). A break below the 200-day moving average at 39.57 is required to open the door towards 36.40 and possibly 33.83.
Brent Crude; Daily Chart