This week the price the crude oil Brent has approached to the level of 97.00 USD per barrel; but failed to overcome this level. The strongest pressure on oil prices had been put on Wednesday and Thursday. Weekly report on the US oil and oil products inventories showed the rise by 3.7 million barrels. Additional pressure on the price was caused by positive data on the American labor market, which demonstrated that the number of primary and secondary applications for unemployment benefits has declined. These statistics provoked the decline in oil price to 90.40. This level is still maintained. OPEC’s intention to reduce production volume by 500 thousand barrels this year has stabilized oil prices.
Support and resistance
At the moment Brent continues to trade at the level of 97.40. However, there is a chance of the decline to the level of 97.00. This level seems the key one and breakdown of this level will enable the price to decline to the level of 95.90; otherwise the price can reverse and return to 98.35 (middle line of Bollinger bands)
Support levels: 97.00 and 95.90.
Resistance levels: 98.35, 99.15 and 99.60.
Technical indicators show that the price will continue to decline. MACD histogram is in the negative zone; its volumes are increasing. Stochastic lines are in the overbought zone and directed downwards
In the current situation it is advisable to open short positions with the target of 95.90 if the price consolidates below the level of 97.00. Long positions with the target of 98.35 can be opened if the price pushes off from the level of 97.00 and reaches 97.30.