Last week, Brent followed the same trajectory as WTI, which was up. Oil kept moving higher and higher, and it seems that the bulls are not willing to jump out of the driver’s seat this weak as well. The latest rally started after the price tested the medium-term uptrend line that has been supporting the price action since June, and thus, we maintain the view that the outlook remains positive.
OUTLOOK (SCENARIO A / B)
Brent manged to stop its up-rise at around 70.30 last week, which is one of the key resistance levels from January this year. There is another good at around 70.80, that was this January’s highest point. If the buying activity continues this week as well, then it won’t be a problem for Brent to hit that mark as well. A break above the 70.80 could indicate further interest in the commodity and push the price higher.
Alternatively, if either 70.30 or 70.80 prove to be strong resistance levels for Brent to overcome, then we could potentially see some retracement in the commodity and a pull back to the 67.65 level could be possible. A move below that area, could bring Brent back down to the upwards moving trendline that started in June 2017.