Brent crude oil price has been trading sideways since the start of February 2023. In the coming weeks, the volatility is expected to increase as due to the FOMC meeting and the announced Russian cuts. Earlier this month, the Russian Deputy Prime Minister announced a significant output reduction starting from next month.
On Monday, the price slid by 0.75% during the London session. At the time of writing, Brend oil price is trading at $82.22 after bouncing off the $80 level last week. There are many factors affecting the price action, including China’s reopening and the reduction in output by Russia.
From March, Russia will be reducing its output by 500,000 barrels per day. This, together with increased demand from China, will put an upward pressure on Brent crude oil prices. The strengthening dollar is also quite adversely affecting commodity prices.
Gold, Silver, and Crude oil price have been showing a negative price action since the release of inflation numbers. The next month’s FOMC meeting is expected to raise the rate further. This may offset the production cuts by Russia to some extent.
Technical analysis on the daily timeframe reveals that the Brent crude price is trading inside a symmetrical wedge. Since Jue 2022, the price has failed to break out of the downward trendline. However, the price has also maintained a local uptrend that started after the December low of $75. The price is also trading below the 200-day MA, which lies at $94.74.
Nevertheless, bulls have failed to attempt a breakout, but the moment of truth is here. A closer look at the chart shows that the Brent crude oil price is approaching an apex. In the next couple of days I expect a big move in one direction that will either take out the January high of $89 or the December low of $75. Many traders are awaiting this breakout sitting on the sidelines.
This post was last modified on Feb 27, 2023, 07:12 GMT 07:12