Rally lost momentum
Brent crude has been running low on momentum in recent days and may be primed for a corrective move.
The fundamentals have become increasingly oil prices as the weeks have passed, from a strong economic recovery to a carefully managed return of output from OPEC+ and now, an energy crisis that has increased oil crude demand by 500,000 barrels per day.for
A year and a half after oil prices went negative, $100 a barrel is realistically in sight and OPEC+ is doing little to stop it. After a strong surge, prices are starting to see some resistance though after Brent peaked above $86.
The pullback we’ve seen today has brought the price to an interesting. As you can see on the 4-hour chart, the bottom of the 55/89-period combines with fib levels and the rising , which could provide support around $83.50.
This would be a very shallow corrective move, but it has been a very powerful rally in recent weeks so that wouldn’t come as a great surprise.
That said, the momentum indicators recently have shown a divergence with price which may suggest a larger correction is on the cards, with $83 the next test but $80-81 being the next major barrier to the downside.
A move below $84 ( ish ) would also represent a break of a neckline, which could support a deeper correction before interest potentially appears once more.
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