Oil saw a sharp rally Monday though we are unable to put a finger on the actual cause. Two things coming up for oil is today’s Monthly Report from OPEC which could clarify supply and demand expectations from the Cartel’s perspective. Meanwhile a clearer source of demand would be the upcoming US driving season which Goldman Sachs is pointing its fingers at to push prices to the $86 per barrel area for Brent Crude.
Resistance
- 84.49 – 50D Moving Average
- 83.56 – Intraday Consolidation High
- 81.90 – Daily Consolidation Floor / Monday High
Support
- 80.22 – Intraday Consolidation Resistance
- 79.17 – Intraday Consolidation Support
- 77.86 – Intraday Consolidation Resistance
Brent Crude is current just under the Daily Consolidation Floor from May with a stochastic that is pushing into overbought areas. Intraday we are overbought in the hourly charts though we see little signs that we are at risk of reversing. Given this we prefer taking a straddle, a clear close above 81.90 in the hourly charts should signal a reentry to the May consolidation area in the near furture. A bearish engulfing in the hourly scale meanwhile can be seen as a sell though the downside is likely limited.
