Just when we thought we can *finally* take that road trip, major oil benchmarks are heading higher in their charts.
What’s up with that?!
Here’s the chart that I’m looking at:
Brent Crude (U.K. Oil): 4-hour
In case you missed it, Brent crude oil has been taking a chill pill since hitting $138 earlier this month.
All the selling has dragged UKOIL back down to $98 but prices have since climbed to $111. What’s up with that?!
A couple of factors, as it turned out. For one thing, world leaders still haven’t resolved Russia’s invasion of Ukraine.
Waning fears of global growth have also encouraged risk-taking and buying of high-beta assets including crude oil.
Finally, Yemen’s Iran-aligned Houthi group has fired drones and missiles at Saudi’s energy facilities and petroleum products distribution terminal. While the impact is temporary, there is still a reduction in Saudi’s production.
Will bulls continue to push oil higher? Keep in mind that Brent crude is on an uptrend and has just bounced from the 200 SMA on the 4-hour time frame.
Watch how Brent crude responds to the 38.2% Fib of March’s downswing. Not only does it line up with an area of interest from the first weeks of the month but it’s also around the 100 SMA on the chart.
Resistance at the $112.50 levels could drag oil back to the $106 or $100 support zones.
A clear break above the resistance zone, however, could push oil back up to its monthly highs. Yipes!
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