Crude oil price is set for the sixth consecutive week of gains as the demand and supply dynamics remain at play. In the previous session, the benchmark for global oil – Brent futures – rose above the psychological level of $90 for the first time since October 2014.
Granted, it has since pulled back below that zone as the market enters into profit-taking mode. Even as some investors sell their positions, the commodity has remained on an uptrend amid concerns that the heightened geopolitical tensions will result in supply disruptions. The rallying has been on for about six weeks, with Brent oil surging by 29.39% during that timeframe. For over three weeks now, it has held steady above the crucial support level of $80.
OPEC+’s policy on gradually increasing production has also contributed to the ongoing concerns over tighter supplies. In its last meeting, the alliance decided to continue with its current program into February. In the next meeting, which is scheduled for the coming week, investors will be keen on whether the 400,000 bpd production increase will continue into March.
In recent months, OPEC+ has struggled to reach the agreed-upon quota. Subsequently, there are growing worries that the spare capacity may not be adequate in case of geopolitics-induced disruptions.
Brent futures were at 89.70 at the time of writing. The benchmark for global oil is trading sideways after pulling back from the 2014 high reached on Thursday.
A look at the four-hour chart signals that crude oil price will likely remain on an uptrend despite the current selling. As the week comes to an end, it will likely continue to find support along the 25-day EMA at 89.05. Subsequently, it may remain within a horizontal channel with the week’s high of 91.06 as the range’s upper border. However, this bullish outlook will be invalidated by a move below the 50-day EMA at 88.00.
This post was last modified on %s = human-readable time difference 10:35