Brent Oil slips after Double Top at US$ 80.50

Soaring crude oil prices witnessed a glitch in the last few sessions which for now can be considered as a short-term profit booking phase. Brent Oil prices hit a Double Top at 80.50 levels on May 17 and 22 and thereby saw a sharp fall up to 74.55 levels. The fall seems provisional as the prices are expected to hit above 80 yet again, followed by US$100 per barrel mark in the upcoming sessions.

With Venezuela being hit by economic depression, the oil production from this country is about to come to a pause, thereby creating supply scarcity and an increase in international crude prices. Further, production cuts from OPEC and Saudi Arabia would also raise prices.

Considering the broader view, after hitting 147.50 in July 2008, Brent Oil price had formed a Bearish Engulfing on Monthly time frame, with which it plunged sharply to 36.20 by the end of the same year. The prices bounced back to 128.40 levels during March 2012 and formed a Symmetric Triangle pattern up to June 2014. Brent witnessed a pattern breakdown in July 2014 at 105 levels which dragged it straight to 27.10 in January 2017. Thereafter, Brent formed a bullish reversal Hammer pattern with which it witnessed a gradual surge making higher tops and higher bottoms. Since June 2008, this closely followed commodity has seen relatively sharper upside rally from 44 to recent 80 levels.

Considering the recent view, after hitting Double Top at 80.50, the prices have corrected near to 76.4 per cent retracement of the rally from 72.38 levels. In case the prices bounce back, we hold 76.80-77.80 as immediate resistances, followed by 78.20. Above 80.50, we can talk of 88 levels. In case the prices continue to correct, we may see 72.38-70.80 as supports. The level of 66.90-61.80 would act as crucial level as below these Brent may see a trend reversal.