Crude Oil Price Eases From its Two-Year High on Profit-Taking

Summary:

Crude oil price is trading lower after Brent futures hit its highest level since May 2019. The decline is due to profit-taking.

Crude oil price has eased as investors take profit. On Monday, Brent futures were at $72.27, which is its highest level since May 2019. In the same session, WTI futures surged to $70, which it last reached in October 2018.

Besides, the strengthening US dollar is exerting pressure on crude oil price. At the time of writing, the dollar index was up by 0.16% at 90.11. It is rebounding after hitting an intraday low of $89.90 in the previous session. Investors’ focus is now on the weekly US oil inventory data. API is scheduled to release its numbers later in the day while EIA’s data will be presented on Wednesday. Since mid-May, there has been a consistent decline in oil stockpiles as the summer travel season gains momentum. In the previous release, API’s reading was at -5.360 million barrels.

Brent technical outlook

Crude oil price is down by 0.55% at 71.06. Brent futures are stabilizing at around 71 after dropping from an intraday high of 72.27 in the prior session. On a four-hour session, it is trading along the 25-day EMA and above the 50-day EMA with an RSI of 50. While the outlook is rather neutral, I bear a bullish bias.

I expect crude oil price to rise further to $72 as a reaction to the ongoing optimism and US oil inventory data. However, before reaching that target, it is likely to seesaw at 71. On the other hand, It may drop to find support at 70.50 along the 50-day EMA.