Brent Oil Forecast: Attempted bullish break, but failed despite the positive news flow

Omkar Godbole FXStreet Contributor

Brent oil prices rose to a two-week high of $57.41 today on the back of falling factors-

Strong Chinese oil imports figure
Drop in US oil production
Fears that Trump may not re-certify the Iran nuclear deal and impose fresh sanctions on the OPEC member
Falling US oil rig count
Broad based USD weakness

The data released in the US on Thursday showed crude inventories dropped 2.7 million barrels in the week to Oct. 6. US oil production dropped by 81,000 barrels per day to 9.48 million bpd.

China reported a pick up in oil imports in the Asian session today. As per Reuters report, oil imports averaged 8.5 million bpd between January and September and hit 9 million bpd in September.

Meanwhile, Baker Hughes data released a few minutes ago showed the number of active oil and gas rigs in the United States decreased this week by 8 rigs. The total rig count now stands at 928 rigs; up 389 rigs on the year.

Technicals

Daily chart

The chart shows-

Despite the higher lows, Brent has failed to hold above the resistance at $57.14 (Oct 6 high). Today's candle has a long upper shadow.
The 14-day RSI holds below the rising trend line.

View

Brent oil is trading in a 'no man's land' - between $57.14 (Oct 6 high) and the support offered by the trend line sloping upwards from the June 21 low and July 10 low.
An end of the day close above $57.14 would open doors for $60.00 levels.
Bearish Scenario - Rejection at $57.14 today and an end of the day close below the rising trend line on Monday could yield a quick fire sell-off to the 200-SMA level of $52.00.

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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