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Brent crude oil has easily held above the $105.00 level, due to no resolution in Ukraine/Russian war, and tightness in the physical oil market, which propels Brent increasingly closer to the $100.00 resistance level.
United States President Biden gave his State of the Union address yesterday. While he did so, Brent oil kept on rallying, despite the news earlier of a US Strategic Oil Reserve release.
This morning more firms announced the cessation of business in or with Russia, including notably Ford, Boeing, and crucially, Exxon Mobile, which is one of the world’s largest oil companies.
The US announced also it was banning Russian flights from US airspace and that its going after Russian oligarchs’ assets. The United States following the UK is bearish for risk, and bullish for the oil market.
Make no mistake, if China were to report a significant increase in imports it would have a heavily bullish effect on Brent Crude and commodity prices, as the West would then face a further glut and more tensions with China.
For me, I see the $125.00 level as a possible bullish target. In reality, intraday we could see the $112.00 level tagged next, but don’t be surprised if Brent oil overextends towards $125.00
According to the ActivTrader market sentiment tool some 71 percent of traders are bullish towards crude oil, leaving plenty of scope for a further upside, as retail traders are slow to jump on the bull train.
Brent Crude Oil short-term Technical Analysis
The lower time frames currently show that Brent Crude oil is in a strong bullish trend, with Brent trading nearly $10.00 away the $120.00 resistance level.
A recent invalidation of a large head and shoulders pattern has taken place on the four-hour time frame, with the measured target of the pattern located around the $112.00 level.
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Brent Crude Oil medium-term Technical Analysis
The daily time frame shows that Brent oil has formed massive amounts of bearish MACD price divergence and is present down towards the $83.00 level.
It should be noted that this negative divergence eventually leaves plenty of scope for a healthy correction to the downside at some stage, but now, don’t fight this monster price trend.
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