Most analysts are sure that the current oil price is unfairly low, and Brent oil price has been falling for the last few days. It's mainly connected with OPEC countries increasing production volumes. Besides, lifting sanctions against Iran may open markets to Iranian oil. On the other hand, oil consumption is also rising, with the USA, China, Japan and India being the key oil consumers. These countries have registered significant consumption growth. That could be linked to the fact that they are building up oil products stocks at low price while waiting for the quotes to start growing.
Support and resistance
Last week, the pair reached the key resistance level of 59.50 and skidded again. The tool is currently trading at 54.90.
A further slight decrease may be expected in the shortest time, but prices should start to grow in the medium term. By the end of the second quarter, prices may have grown to this February's local highs at 62.60. If the level of 62.60 is broken down, the price will move up to 65.00 and 67.50. Statistic agencies forecast the growth of up to $70 per bbl by the middle of this year and to $75 per bbl if the American currency weakens.
Support levels: 54.70, 54.00, 53.50, 52,50, 51.85, 51.00.
Resistance levels: 56.00, 56.50, 57.30, 58.30, 58.50, 60.00, 61.50, 62.60, 65.00, 67.50, 70.00.
Long positions should be opened at current price and from key support levels at 53.50, 52.50, 51.85 with profit fixing at 62.70.