Brent Oil is having another go at 1-hr 200-MA hurdle
|Oil prices ended on a higher note on Monday after Saudi Arabia pledged to lower oil exports, while Nigerians agreed to limit their production.
Despite the positive developments, the 1-hr 200-MA hurdle is proving out to be a tough nut to crack. Multiple attempts to cut through the moving average have in the overnight trade. Currently, prices are having another go at the 1-hr 200-MA seen at $48.67.
At the meeting of OPEC and non-OPEC producers in St. Petersburg on Monday, Saudi announced that it would be capping its exports to 6.6 million bpd, a decline of almost a million bpd from the country’s export level last year. Furthermore, Nigeria agreed to cap its output at 1.8 million bpd, which means an increase of about 100,000 bpd from its current level.
It is widely believed that these developments coupled with the possibility of disruptions to Venezuela’s exports to the US could lead to higher oil prices. However, as mentioned above, the 1-hr 200-MA still stands intact as a strong resistance.
Brent Oil Technicals
The 1-hr chart shows a bearish crossover between the 50-MA and 200-MA. A break above $48.74 (overnight high) could yield a rally to $49.17 (July 20 low on 1-hr chart). On the downside, failure to hold above $48.57 (1-hr 50-MA) would open up downside towards $47.67 (July 24 low).
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