The price dropped sharply and erased the last two day’s gains. It could drop much deeper in the upcoming days if will close the day below the $57.30 per barrel. Brent is very heavy right now and seems poised to turn to the downside again in the upcoming period. The rate is pressuring an important dynamic support, a valid breakdown will signal a further drop in the upcoming period.
I’ve said in the previous weeks that the rate could start a larger drop if will stabilize somewhere below the 57.00 psychological level. Price increased in the last weeks, but I’ve said that this could be only temporary and the bears could take the lead again on the short term.
Brent drops even if the United States Crude Oil Inventories have dropped to -5.7 million barrels in the previous week, much below the -4.7M estimate and versus the -2.7M in the former reading period.
Price edges lower on the Daily chart and looks determined to take out the dynamic support from the median line (ML) of the major ascending pitchfork and the horizontal support from the 57.72 static support.
Will drop much deeper if will close below the median line (ML) of the ascending pitchfork. Technically, it is expected to drop much deeper after the failure to reach and retest the upside line of the ascending channel and the 59.50 previous high. Only a valid breakdown from the up channel will signal a further drop.