The price of oil remains high. Military conflict in Iraq plays the major role in the dynamics of oil prices. The Iraqi army continues fighting with extremists, who capture towns and oil refineries of the country. Nevertheless, the largest oil fields are located in the South of the country and are now safe. Investors’ concern about disruption in oil supplies from Iraq prevents sharp decline in the price of Brent. Although there have been some reports saying that OPEC possesses enough oil to compensate for shortfalls in deliveries from Iraq, if development in Iraq will undergo under the worst-case scenario. Investors do not rush to liquidate long positions, as it is not expected that Brent price will fall dramatically.
Support and resistance
On the four-hour chart the price has broken down the middle line of the Bollinger bands indicator, indicating probability of the downward correction to the bottom moving average at the level of 113.20. MACD histogram is moving along the zero line, showing the consolidation in rate.
Resistance levels: 114.20, 115.00 and 115.50.
Support levels: 113.20, 112.50 and 112.00.
It is likely that the price will move in the range of 114.20-113.20. Buy positions can be opened from correction level of 113.20 with the target of 114.20. Sell positions can be opened from the level of 114.20 with the target of 113.20. Brent can go above the level of 114.20 only in case of aggravation of the situation in Iraq. In such case the price may go up to the recent highs at the level ofPublication source