At the beginning of the week, the price of oil fell from the levels of 62.30, 62.00 to $61.30 per barrel but gained back all the losses on Tuesday. The price strengthening was the result of negative expectations about the US oil reserves that were forecasted to drop by more than 3 million barrels. Contrary to expectations, the reserves showed an increase, after which the price returned to the opening levels of 62.00, 61.80 and remained in the narrow channel between 62.70 and 61.60 since.
Brent crude oil is falling for almost a month. The main causes remain an increase in output by OPEC countries and the possibility of sanctions removal from Iran, which would add Iranian oil exports to the supply.
Pressure on the price is going to be growing towards the next meeting on Iranian nuclear program.
Support and resistance
Two possible scenarios can be outlined.
The most probable one is further price fall towards 60.00 and 59.70. Alternatively, the price may decrease towards May-June lows at 61.30, 60.00 and continue movement in a narrow sideways channel.
Support levels: 61.60, 61.30, 61.00, 60.75, 60.00, 59.70.
Resistance levels: 62.00, 62.35, 62.70, 63.10, 63.75, 64.20, 65.00, 65.30, 65.90, 66.20.
It is recommended to build up on short positions and place pending sell orders from key resistance levels. Stop-loss should be set above 63.10.