Current trend
The price of crude oil Brent has been falling since the beginning of this year. If international sanctions against Iran have been lifted, black gold will drop in price even further. Additional pressure on the Brent rate was caused by the US data on the increase in gasoline stocks by 6.2 billion barrels and the rise in the inventories of distillates by 5.8 billion barrels. One the reasons of the increase of fuel reserves is associated with the bad weather, which led to the cancellation of most international flights and abandoning of using personal vehicles.
At the same time oil quotes were supported by tense situation in Libya, where Energy Minister threatens to stop supplies if foreign companies do not stop buying oil from the rebels at the below market price. Price dumping can lead to the reduction of oil production and interruption of delivery, which will add confidence to the “bulls” at the commodity market.
Support and resistance
The instrument continues to trade in the downtrend. Quotes of Brent have reached the bottom limit of the trading channel at the level of 106.16. The nearest support level is 108.17
Trading tips
Short positions are recommended after breakdown of support level of 106.00 with protective order at 106.30 and a target of 105.25.
Dmitry Agurbash
Analyst of LiteForex Group of Companies
