FXStreet (Mumbai) – Brent oil ran into offers at the daily high of USD 33.97 and now trades around USD 33.44 (23.6% of Oct higher-Jan low).
Is corrective rally over?
Prices are on a corrective mode since the beginning of the current week as the major OPEC and non-OPEC producers took turns to express readiness to work in co-operation to support prices. However, it is easier said than done, still was enough to trigger a correction in the prices.
But the central problem – oversupply remain intact. The US Energy Information Administration data released yesterday showed inventories at record. Earlier this week, Iraq also signaled a possibility of higher production. Hence, caution could set in now that prices have retraced 23.6% of the latest decline.
Brent Technical Levels
The immediate resistance is seen at 34.00, above which the prices could test 35.96 (Dec 22 low), which if taken out shall open doors for 37.26 (5-DMA). On the other hand, a break below 32.54 (daily low) could see the prices test 5-DMA at 31.94, under which prices could head to 30.367 (5-DMA).
(Market News Provided by FXstreet)