Brent crude prices at resistance turned support levels

Indian stock markets have been slipping over the Brent Crude since the mid of August 2018 amid trade war escalations, Iran sanctions, retaliatory measures. Moreover, a recent dip in Libya’s crude output due to worsening security situations around its Sahara oil field too has helped Crude oil prices to surge further. However, lately, Brent oil prices dipped below US$80 per barrel after stock sell-off and a surprising growth in the US inventories.

The Brent oil prices retreated from its 4-year high of US$86.74 made on October 3, 2018 up to 78.50-80 levels which is its multiple resistance turned support zone for now. Earlier, Brent had given a Cup and Handle pattern breakout at 80 levels with which the prices soared to 86.74 levels. Since October 12, the stock is trailing at the support levels.

Going forward, if the prices correct some more, we hold 78.70 followed by 77.40-77.30 as the supports for Brent in the near term. The level of 75.60 would act as provisional trend reversal. However, if the prices bounce back and start surging, we hold 80.30 followed by 81.85-81.90 as the immediate resistance. 82.30 will act as the next resistance level and above 85.45, we may see Brent heading for another rally in the medium term.