Commodities Watchlist: Potential Resistance Area for Brent Crude Oil (UKOIL)


 In case you missed it, Brent crude oil prices have been having a good second half of the month so far.

And why not? Easing banking concerns have made it easier for oil bulls to price in demand recovery in China.

It also didn’t hurt that a dispute among leaders of Iraq’s semi-autonomous Kurdistan region forced Iraq to halt about 400,000 barrels a day in oil production.

Brent Crude Oil (UKOIL): 1-hour

Brent Crude Oil (UKOIL) 1-hour ChartBrent Crude Oil (UKOIL) 1-hour Chart by TradingView

UKOIL, which found a bottom at $70.20 early last week, is now trading closer to the $78.50 minor psychological level.

The 100 SMA has also recently crossed above the 200 SMA and is hinting of a bullish trend change after a sharp downswing earlier this month.

Can bulls keep up the momentum?

UKOIL is chillin’ near the 50% Fibonacci retracement of March’s downswing, which is relevant enough before we note that the $78 – $80 area was also a major support zone in 2023.

Oil bulls who like trading “healthy” trends can also take profits at current levels as they also line up with the top of an ascending channel on the 1-hour time frame.

If today’s Energy Information Administration (EIA) crude oil stock report shows a bigger inventory than the previous week as markets are expecting, then UKOIL could dip towards the $75.50 mid-channel area if not the $75.00 channel support.

I’m not ruling out further weekly gains though.

If risk-taking continues to push “risk” assets like crude oil higher, then UKOIL could hit other resistance levels like $80.00 or $81.00 before the sellers step in.