Will Brent Crude Turn 60?

Saudi rhetoric sees Brent in sight of $60.00 a barrel but is the rally in oil puffed up on talk or fundamentals?

Oil raced higher overnight with Brent finishing in sight of the magical 60.00 a barrel mark, spurred on by Saudi remarks supporting the oil production cut through to the end of 2018. Brent climbed 1.75% to close at 59.50. Meanwhile, WTI also managed to post a respectable 1.30% rally of its own to finish the New York session at 52.55. With Brent spot at two-year highs and the prompt futures in backwardation, the stage would appear set for an attempt higher. The 60.00 region will be a formidable obstacle, and it remains to be seen if oil can sustain these levels on the back of Russian and Saudi talk alone.


Brent spot has drifted 15 cents lower in early Asia to 59.35 as some profit taking has set in. Nearby support lies at 59.00 and 58.65, and the overnight high of 59.55, the first hurdle. We expect 60.00 to have substantial selling interest from producer hedging initially. A break, however, opens up a considerable amount of clear air on the charts with no notable resistance until the 68.00 regions. A daily close above 60.00 will set an interesting scene from a technical perspective.

Brent Daily


WTI spot lagged Brent overnight, weighed down by high inventory numbers and surging production. It too has seen some early Asia profit taking, drifting 10 cents lower to 52.45 although still very close to its New York highs. Trendline support appears at 51.90 followed by the 51.00 regions. Above here lies a substantial region of resistance between 53.50 and 54.50. This area capped all of the attempted rallies from the end of 2016 through all of quarter one of 2017. Given the amount of producer hedging around it will likely prove a very tough nut to crack initially. It may be assisted by the Baker Hughes Rig Count if it shows a significant drop this evening.

WTI Daily

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley

Senior Market Analyst, Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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