Brent oil clocks 30-month high
Brent oil caught a bid wave in Asia and rose to $54.34; its highest level since June 2015.
The unplanned closure of a major North Sea pipeline for repairs is seen taking off significant barrels of the table. As per Reuters report, "Britain's Forties oil pipeline, the country's largest at a capacity of 450,000 barrels per day (bpd), shut down on Monday after cracks were revealed. The pipeline carries significant amounts of the physical crude that underlies Brent futures."
Consequently, oil is on the rise. Also, the oil market is already tightening due to OPEC-led output cuts. The pipeline closure only validates the bullish case put forward by the output cut deal.
Brent Technical Outlook
Reuters technical report says, "Brent oil may rise further to $65.50 per barrel, as suggested by its wave pattern and a Fibonacci projection analysis."
"The consecutive gains from the Dec. 6 low of $61.13 suggest the progress of a powerful wave 3, the third wave of a five-wave cycle from this low. This wave is capable of traveling into a range of $66.46-$67.05, formed by its 138.2 percent and the 161.8 percent projection levels. A more realistic target will be $65.50."
"Based on the consolidation range from the Nov. 7 high of $64.65 to $61.13, oil could surge above $67.05. A correction could be limited to $64.25."
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
