General analysis Brent for 18.11.2021
Current Dynamics
Brent continues to decline and currently trades below the psychological level of $80/bbl. The API weekly inventory change report released yesterday showed an increase by 655 k barrels, at the forecast of 1.550 million barrels.
The main pressure on the hydrocarbons market is formed against the background of the USA initiative to join efforts with China, Japan, South Korea and India to reduce oil prices. President Biden urges the allies to release strategic stocks for sale in a coordinated manner and thus reduce global energy prices. At the same time, Japanese legislation excludes the sale of oil from state reserves. Seoul has tentatively rejected the U.S. proposal. China, which is the largest oil importer, is a key element of the potential deal. The agreement of official Beijing could be a big problem for OPEC, and the interaction between the U.S. and China could signal a change in geopolitics and strongly influence the market.
U.S. manufacturing activity data will be released today at 15:30 (GMT+2). Tomorrow at 20:00 (GMT+2), Baker Hughes will release a report on the number of active drilling rigs.
Support and resistance levels
On the 4-hour chart the instrument is consolidating near the lower Bollinger band. The indicator is directed downward and the price range has widened, indicating a continuation of the downtrend. MACD histogram is in the negative zone, keeping a strong sell signal. Stochastic turned up at the border of oversold area, this situation can be interpreted as a downward correction.
- Support levels: 76.70, 77.70, 78.85.
- Resistance levels: 80.00, 80.80, 81.90, 82.75.
Trading scenarios
- Long positions should be opened at the current price with a target of 81.30 and a stop loss at 78.40. Implementation period: 1-2 days.
- Short positions are recommended to open below the level of 78.75 with a target of 77.75 and stop-loss at 79.50. Implementation period: 1-2 days.