| Scenario | |
|---|---|
| Timeframe | Weekly |
| Recommendation | BUY STOP |
| Entry Point | 88.00 |
| Take Profit | 91.50 |
| Stop Loss | 87.00 |
| Key Levels | 81.30, 85.00, 88.00, 91.50 |
| Alternative scenario | |
|---|---|
| Recommendation | SELL STOP |
| Entry Point | 85.00 |
| Take Profit | 81.30 |
| Stop Loss | 87.00 |
| Key Levels | 81.30, 85.00, 88.00, 91.50 |
Current trend
Benchmark Brent Crude Oil price adjusted at 87.00, as forecasts of weakening oil demand from China were not confirmed.
Thus, since the beginning of spring, some experts assumed that China would gradually reduce oil purchases due to a poor economy that has not fully recovered from COVID–19. However, in March, the country increased its oil supplies. Thus, imports from the Russian Federation amounted to 2.55M barrels per day, reaching the June levels. In March, China purchased 10.81M tons of oil, which exceeds 9.1M tons in February, and the average daily figure was 349.0K tons compared to 314.0K tons earlier. Thus, the total value in March adjusted from 44.14M tons to 49.05M tons.
On the other hand, weekly commodity inventories may increase again: according the American Petroleum Institute (API) data, a positive trend will be 1.200M after 4.090M previously, and the US Department of Energy’s Energy Information Administration (EIA) data may reflect an increase in strategic reserves by 1.700M after an increase of 2.735M a week earlier, which will continue the positive trend for the fourth week in a row.
According to the Chicago Mercantile Exchange (CME) FedWatch Instrument, yesterday’s trading volume was the month’s record of 1.253M, exceeding the first week of April average of 982.0K deals.
Support and resistance
On the daily chart, the trading instrument is moving in a corrective trend, approaching the support level of the ascending corridor 92.00–85.00.
Technical indicators are slowing down the buy signal: fast EMA of the Alligator indicator are approaching the signal line, and the AO histogram is forming corrective bars in the buy zone.
Resistance levels: 88.00, 91.50.
Support levels: 85.00, 81.30.
Trading tips
Long positions may be opened after the price rises and consolidates above 88.00, with the target at 91.50. Stop loss – 87.00. Implementation period: 7 days or more.
Short positions may be opened after the price declines and consolidates below 85.00, with the target at 81.30. Stop loss – 87.00.
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