Saudi Arabia held on their ground and refused Biden’s concert to increase oil production by keeping their commitment to stick to the OPEC+ production plan.
The turn down of Biden’s request helped Brent crude prices to close above $100 on the last day of last week’s session. Uncertainty regarding China’s demand recovery holds oil prices from its impulsive uptrend continuation.
Growing COVID19 cases are not to be considered as one of the main factors which could affect crude oil prices but certainly have their impact. OPEC+ on the other hand yet to fulfill its plan on production increase, hence the rise of crude oil prices are most likely.
Market also has the relaunch of the Russian Nord Stream 1 pipeline to supply Europe with Natural gas which is expected this Thursday.
In case the launch is postponed, natural gas prices will soar, dragging the energy sector commodities, including oil.
On the technical analysis side, Brent still looks bullish on a multi-timeframe analysis below based on the Elliott Wave principles.
This weekly Brent chart demonstrates a completion of a triangular corrective 5-wave pattern and a solid impulsive breakout this year.
Daily Brent oil chart displays a completion of an impulse 5-wave pattern with a correction down to Fibonacci 0.618 level.
Major support to Brent oil’s climb was also submitted by the 200-day moving average (blue line).
However to climb to new-highs and to the local high of $138, Brent must overtake key resistances at $105 and $109. If Brent closes above these resistances, it will continue the climb to $123 and if the impulse is strong enough, Brent might soar to $139 by late August early September.
As of now, the intraday hourly Brent oil chart has formed an ascending parallel channel, the retest of the upper edge of the channel and RSI indicator’s reach to “overbought” level indicate a slight correction down to $101 where Brent should find another support and climb towards $105.
This article was originally posted on FX Empire
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Source: https://finance.yahoo.com/news/brent-analysis-saudi-arabia-rejects-111747744.html