Brent oil is establishing above $120 barrier which was broken on Friday and hit new ten-week high on Monday, as concerns about persisting tight supply on growing doubts that OPEC+ is likely to achieve increased output target and cover shortage caused by ban on Russian oil, while the prices were also lifted by Saudi Arabia’s unexpected increase of oil prices for Asian buyers.
Despite expectations of gradual increase of production from cartel’s member countries, forecasts show that Russian output will fall by 1 – 1.5 million barrels per day by the end of 2022 that would keep oil market under pressure.
Bullish technical studies add to positive outlook as initial bullish signal was generated on last week’s close above $120 level.
Bulls eye Fibo level at $122.44 (61.8% of $138.22/$96.92) and 24 Mar lower top at $123.72, violation of which would spark stronger acceleration higher.
The action should ideally stay above $120, with rising 10DMA offering solid support at $116.74, which should contain extended dips.
Res: 120.87; 121.63; 122.44; 123.72;
Sup: 120.00; 119.61; 117.57; 116.74
