At this point markets more or less know where OPEC stands with regard to production and the question for us is the demand side. With the US driving season already here we should expect demand to pick up at the very least proving a good floor for prices. Throw in speculations over the impact of the start of the easing cycle and our bias for oil in the near term will be to look for prices to begin to pick up,
Resistance
- 84.68 – High for May
- 83.85 – 50D Moving Average
- 83.08 – Intraday Consolidation High
Support
- 81.56 – Daily Consolidation Floor
- 80.22 – Intraday Consolidation Resistance
- 79.17 – Intraday Consolidation Floor
Brent crude is well supported with its immediate 81.56 Daily Consolidation Floor while indicators suggest vulnerability with the stochastic coming off overbought areas. Note we have had an upside gap at the open and prices are in the process of covering the gap. Given the support and the earlier move we will look for signs of exhaustion among bears. Long tails in hourly charts coming off 81.56 will be an excuse to buy. A daily close below the said price will have us thinking of a test of the earlier lows for the month.
