Brent turns volatile on global oil politics

Brent crude had kicked off reversal since the OPEC meeting which ended fruitlessly. Despite a positive nod from Saudi Arabia and Russia for higher production, the backdrop of poor output from Libya and Canada prompted supply scarcity. Moreover, the US limiting imports from Iran even by India resulted in a revival in the oil prices which hit US$79.70 per barrel. Lately, drop in US inventories for the straight second week and a threat from Iranian commander also helped prices to surge. However, Brent slipped yet again after Saudi Arabia announced that it raised output nearly by 5,00,000 barrels per day in June to curb scarcity. Saudi and Russia are striving hard to bring in equilibrium. Further, rising trade war concerns in US and China too dragged oil prices down, hitting a low of 76.60 levels as of 15:58 hours IST.

We had earlier indicated a Double bottom in Brent near 72.35-72.45 levels and thereby a price surged of up to 79.70, breaching its resistance at 78.75 levels. Now, the prices are trading in between 38.2 and 50 per cent retracement level. We can expect a bounce back from 76 to 75.2 levels. In case it falls beyond the said levels, prices can hit 72.95-72.45 again, which is currently a crucial support. On the upside, 78.50 followed by 79.70 will act as immediate resistances, followed by 80.50, which is the provisional peak.