General analysis Brent for 03.12.2021
Current Dynamics
Yesterday and today Brent crude oil prices are rising after the OPEC+ meeting. The participants of the agreement once again demonstrated flexibility and retained control over the oil market in difficult times.
OPEC and its partners did not make any adjustments to the current production plan. Major oil producers first want to assess the impact of the new Omicron strain on demand. The impact of the new virus on the human body is still unclear. The next OPEC+ meeting will take place on January 4, but participants in the agreement, if necessary, are prepared to meet before the meeting and quickly adjust policy if Omicron hits demand.
At the same time, it is worth noting that the release of strategic reserves may be delayed. The market is expected to oversupply oil in January, with the U.S. planning to return all of the allocated for sale volume within two years. In fact, the sale of strategic reserves is a commodity credit, and there are not many who are willing to buy cheap oil and return it at an undetermined price.
The U.S. labor market statistics will be released today at 15:30 (GMT+2). The data is important for the market, a stronger dollar will put pressure on oil. At 20:00 (GMT+2), Baker Hughes will release a report on U.S. drilling activity.
Support and resistance levels
On the 4-hour chart, the instrument trades at the top of the Bollinger Bands. The indicator is pointing downward and the price range has contracted, indicating an uptrend correction. MACD histogram is in the negative zone, maintaining a buy signal. Stochastic entered the overbought area, a sell signal may be formed before the end of the day.
- Support levels: 65.70, 66.90, 68.20, 68.80, 70.15.
- Resistance levels: 72.25, 74.60, 76.80.
Trading scenarios
- It is possible to open long positions above the level of 72.30 with a target of 74.70 and a stop-loss at 69.85. Implementation period: 1-3 days.
- Short positions should be opened below the level of 69.95 with a target of 68.11 and a stop-loss at the level of 70.80. Implementation period: 1-2 days.