After testing $80 level for a few days, BRENT price has been in a falling channel, making lower highs and lower lows. Iran sanctions and rapidly escalating economic troubles in Venezuela create problems for the world oil supply, but Russia and Saudi Arabia seem ready to increase supply if necessary.
June 22nd meeting in Vienna of OPEC should set the direction for the price for upcoming months. There is also discord among OPEC members as Iran, Venezuela and Iraq do not agree with Russia and Saudi Arabia to increase production.
While President Trump is also criticising OPEC for a while now that the prices are artificially high, it could be due to US shale industry. Shale investors lost over $ billions in May due to rising oil prices.
On the technical side, price retraced to the 38% level after last Friday’s sell-off and bounced back up to 50 SMA on Monday. The channel is converging on the confirmed daily trendline. A break below the trendline and 50% retracement would be a first signal for a bearish run. Break below $70 and 61.8% would be final confirmations. Alternatively, if OPEC do decide to cut production, a break above the channel would signal a test of $80 again and potential break higher. Price can even be seen as forming a H&S pattern with a choppy right shoulder. Still, fundamental data will be the main drive.
Happy Trading!
June 22nd meeting in Vienna of OPEC should set the direction for the price for upcoming months. There is also discord among OPEC members as Iran, Venezuela and Iraq do not agree with Russia and Saudi Arabia to increase production.
While President Trump is also criticising OPEC for a while now that the prices are artificially high, it could be due to US shale industry. Shale investors lost over $ billions in May due to rising oil prices.
On the technical side, price retraced to the 38% level after last Friday’s sell-off and bounced back up to 50 SMA on Monday. The channel is converging on the confirmed daily trendline. A break below the trendline and 50% retracement would be a first signal for a bearish run. Break below $70 and 61.8% would be final confirmations. Alternatively, if OPEC do decide to cut production, a break above the channel would signal a test of $80 again and potential break higher. Price can even be seen as forming a H&S pattern with a choppy right shoulder. Still, fundamental data will be the main drive.
Happy Trading!
Note
Note
Despite the Friday's massive rally after OPEC meeting, the channel continues to hold as well as the 50 SMA.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.