Brent oil holds below $80.00 as US rig count offsets supply concerns
- Brent oil is flat lined below $80.00 a barrel in Asia.
- Iran sanction worries likely restricted downside around $79.60.
- Upside capped around $79.90 due to rising drilling activity in the US.
Currently, Brent oil is trading at $79.84 per barrel - up 0.10 percent on the day.
An early dip to $79.60 was likely associated with the signs of rising output in the US. For instance, Baker Hughes data released on Friday showed that the US drillers added four oil rigs in the week to Oct. 19, bringing the total count to 873 - the highest level since March 2015.
However, the bears failed to capitalize on the early drop to $79.60, possibly due to fears that OPEC heavyweights will struggle to compensate for the drop in Iran's oil output. US sanctions against Iran’s oil exports will start on November 4.
Technically speaking, oil has retraced close to 50 percent from the yearly high of $86.71 and could remain under pressure in the next day or two as the short-term EMAs (5-day and 10-day) are trending south in favor of the bears.
Brent Technical Levels
Resistance: $80.18 (5-day EMA), $80.82 (10-day EMA), $$81.83 (Oct. 17 high)
Support: $79.48 (50-day EMA), $78.55 (50% Fib R of Aug low/Oct high), $78.00 (psychological support)
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
