Brent crude oil dropped to a level of 53.82 yesterday owing to the news from the Middle East. Oil exporting countries are still competing for the market. Two OPEC members Iran and Iraq announced the highest discounts on hydrocarbons at the same time. The discount Baghdad intends to make on its Basrah Light crude is $4.1 higher than the one its Middle Eastern competitors are offering. National Iranian Oil reduced the price of 1bbl by $2.1.
The increased world oil stocks and oil producing countries' output remain a strong factor that puts pressure on oil quotes. According to the US Department of Energy, oil stocks increased by 4,87 million barrels last week. The analysts polled by Bloomberg had expected an increase of only 3.75 million barrels. The output volume increased and amounted to a daily record of 9.23 bbl last registered in 1983. The US took the lead in oil producing and outperformed Russia according to the results of the year 2014.
Nevertheless, Brent quotes managed to undergo correction and rise above an important psychological level of 55 dollars. The price is currently located near a level of 57.00.
Support and resistance
Support levels: 57.37 (maximum of the Asian session), 60.00 (important psychological level), 62.00 (important psychological level), 63.49 (maximum of 18th December 2014).
Resistance levels: 55.97 (minimum of the Asian session), 53.82 (yesterday's minimum, 50% Fibonacci retracement), 52.30 (61,8% Fibonacci retracement, middle line of Bollinger bands), 50.00 (important psychological level).
If the current trend continues, short positions may be opened from a level of 57.40 with the nearest target at about 59.00. If the level 55.90 is firmly broken, Brent will head for the levels 54.00 and 52.30, from which an ascending movement can resume as part of technical correction.Publication source