THE Brent crude oil which is on an uptrend has the potential to break above the critical resistance level of US$46.50.
If that level is breached, Maybank IB Research expects global oil price benchmark to move upward to its initial medium-term target of US$50.00.
“Our next targets are US$52.00 and US$60.00,” wrote technical analysts Nik Ihsan Raja Abdullah and Tee Sze Chiah. “On the flip side, support is at US$41.20 and US$39.30.”
The Brent crude peaked at US$46.53 on Aug 31 then went into a tailspin, although the downside was capped at US$35.74.
Since its last update on Brent crude oil way back in May, the research house noted that it can conclude that (i) the bottom at US$16.00 was validated; (ii) Brent hit its short-term target of US$39.00 but it’s struggling to reach the medium-term target of US$50.20.
Brent crude is currently trading at US$46.40 range, up 36 US cent or 0.78% from yesterday’s overnight close of US$46.04.
The US Energy Information Administration (EIA) in its short-term energy outlook dated Nov 10, expects high global oil inventory levels and surplus crude oil production capacity to limit upward pressure on oil prices with Brent prices to remain near the US$40/barrel till year-end.
“EIA expects that as global oil demand rises, forecast inventory draws in 2021 will cause some upward oil price pressures,” the information agency pointed out. “EIA forecasts Brent crude oil prices will average $47/barrel in 2021.” – Nov 24, 2020
