Crude Oil is Skyrocketing
By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets
Easter holidays are a quiet time for everything and everyone except for crude oil. On Monday morning, Brent reached the highest levels since November 1st 2018, and frankly speaking, there are reasons for that.
According to The Wall Street Journal and Washington Post, on Monday the U.S. State Department may announce a repeal of benefits for countries purchasing oil from Iran starting as early as May 2nd 2019. There are eight such countries: India, China, South Korea, Taiwan, Japan, Italy, Turkey, and Greece. So far, they could buy the oil from Iran without any sanctions from the U.S., but it was temporary. It seems like the “honeymoon period” is over.
As a matter of fact, Greece and Taiwan are no longer on the list of countries that buy oil from Iran because their share has been reduced almost to zero. Now, this matter depends on the U.S.: if other buyers of Iran oil have to refuse this cooperation, oil prices may go much higher.
The problem is that Saudi Arabia, the major oil producer in the region, is very unlikely to be able to fill this gap in the oil market immediately. This is another reason why market speculators may push oil prices higher.
As we can see in the H4 chart, Brent is trading upwards; it has broken $70.20 to the upside. In the nearest future, the price may start a new correction towards $72.00, which is confirmed by Stochastic Oscillator moving inside the “overbought zone”. After the correction, the instrument may resume trading upwards to reach $76.50.
In the H1 chart, Brent is also trading inside the “overbought zone” according to MACD Oscillator. From the technical point of view, after the divergence the price may start a new correction towards the support level at $72.00. Later, the uptrend may continue to reach the next resistance level at $76.50.
Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboMarkets shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.
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