Current trend

Brent Crude Oil prices rose more than 3.0% on Monday, rising for a fifth straight session, on fears of an escalation in the Middle East and a decline in oil supplies.

Over the weekend, the US Department of Defense announced it was sending a guided missile submarine to the region amid possible attacks on Israel by Iran and its allies in response to the deaths of Palestinian Hamas leader Ismail Haniyeh and Lebanese Hezbollah military commander Fuad Shukr. Such actions could lead to a wider conflict in the Middle East, complicate access to global oil supplies, and push up prices.

The market continues to experience a period of global correction. According to the latest report from the US Commodity Futures Trading Commission (CFTC), last week, net speculative positions in WTI Crude Oil fell from 245.5K to 222.3K. As for the dynamics, the gap in favor of the buyers remains, and the weekly reduction was caused by the liquidation of some positions in speculative categories. Their balance among producers amounted to 403.968K against 349.507K among the “bears.” Last week, sellers opened 12.574K transactions, and buyers – 35.038K contracts, supporting the upward trend.

Technically, the trading instrument growth to the resistance level of 82.50 is corrective, and the general direction of the trend remains downward. If the level of 82.50 is kept, short positions, with the targets of 77.46 and 75.40, are relevant. Otherwise, the correction will continue to the next resistance level of 86.10 and then to the July high of 88.28. The RSI (21) indicator is in the neutral zone and allows us to consider sales.

The medium-term trend remains downward. However, yesterday, the quotes broke the key trend resistance area of 81.60–81.07. If the American trading session closes above it, the trend will reverse upwards, and from tomorrow, long positions, with the target in zone 2 (86.93–86.40), are relevant. If the price returns below the 81.60–81.07 area during today’s trading, the downtrend will remain in force, and it is worth opening short positions, with the targets at 78.67 and 75.74.

Support and resistance

Resistance levels: 82.50, 86.10, 88.28.

Support levels: 77.46, 75.40, 72.98.

Trading tips

Short positions may be opened from the 82.50 level, with the target at 77.46 and stop loss 83.50. Implementation period: 9–12 days.

Long positions may be opened above the 83.50 level, with the target at 86.10 and stop loss 82.50.