Brent oil maintains firm tone on Tuesday and hit new four-year high at $82.18, in extension of strong rally on Monday.
Strong bullish sentiment is boosted by fears on impact from looming US sanctions against Iran as well as OPEC’s unwillingness to increase production and support oil markets which may face the shortage in oil supply, once Iran is out.
OPEC also ignored US President Trump’s request to lower oil prices by increasing output, keeping oil prices well supported.
Fresh bullish signal was generated on today’s rally through important resistance at $81.84 (Fibo 61.8% of $115.68/$27.09, 2014/2016 fall), with daily close above needed to confirm signal and open way for further advance.
Oil is maintaining strong bullish momentum, with daily MA’s in full bullish configuration, supporting the advance.
On the other side, slow stochastic broke into overbought territory and daily RSI turned sideways at overbought zone border, suggesting bulls may take a breather, before resuming.
Former strong barrier at $80 zone now acts as support and should keep the downside protected.
Fibonacci projections at $82.84 (200% of the upleg from $77.36) and $83.89 (Fibo 238.2%) mark next targets, however, bulls may accelerate further in unobstructed positive environment.
Focus turns on release of US API crude stocks report later today and EIA US crude inventories on Wednesday, for fresh signals, as the latest report showed US oil Inventories at record lows and further boosted oil prices.
Res: 82.19, 82.84, 83.00, 83.89
Sup: 81.84, 81.16, 80.48, 80.10