Brent oil is reaching $60! Oil price trend now depends on US's supply. (With Trading Strategy)

At midday in the Asian market on Monday, crude oil prices strengthened. Among them, the price of Brent crude oil futures rose above the $60 mark for the first time since February last year. Part of the support came from the expectation of stronger energy demand and OPEC's output restrictions.

US WTI crude oil futures prices rose 63 cents or 1.11% to 57.48 US dollars per barrel; Brent crude oil futures prices rose 41 cents or 0.69 to 59.97 US dollars per barrel, and rose to 60.05 US dollars per barrel at one time since last year. The price rose above US$60 for the first time since February; natural gas prices rose 2.08% to US$2.942.

Brent's 6-month crude oil contract price difference closed at 2.33 US dollars last Friday, after reaching 2.44 US dollars before, setting a new one-year high, showing that supply is tightening.

Commodities analyst Eugen Weinberg said, "In addition to the increase in investment demand driven by significant price increases, the physical market seems to be getting tighter."

Robbie Fraser, manager of Schneider Electric's global research and analysis department, said that Brent crude oil is testing the important $60 barrier. If successful, "this will be the first time that crude oil prices have exceeded this level since the new crown virus began to have a serious impact on crude oil prices."

OPEC+ continues to tighten supply, US increases production

At the same time, Saudi Arabia promised to continue to reduce supply in February and March, and OPEC+ also stated that it will continue to strictly abide by the production reduction agreement. These actions will help the oil market restore balance.

Brent crude oil has risen for 6 consecutive trading days, the largest increase since June 5 last year. At that time, it rose for 7 consecutive days.

On the other hand, because of higher oil prices, US producers have begun to increase production. According to data from the oil service company Baker Hughes, the number of oil rigs in the United States rose to the highest level since May in the previous week.

In addition, lockdown measures in parts of Europe and Asia continue to curb fuel demand.

Trading strategy (Source: Trading Cenrtral)

Pivot: 56.90

Our preference: long positions above 56.90 with targets at 57.80 & 58.50 in extension.

Alternative scenario: below 56.90 look for further downside with 56.50 & 56.20 as targets.

Comment: the RSI advocates for further upside.

Supports and resistances:

59.00

58.50

57.80

57.37 Last

56.90

56.50

56.20

Guideline for Trading Central strategy

Trend chart reading guideline

1. First look at the time period in the upper left corner of the chart：

・30MIN and 1H chart shows the trading suggestions for intraday

・Daily chart shows the market trend analysis in next 2-3 days

2. The blue horizontal line on the chart marks the pivot: pivot indicates the reversal of the market. When the price is above the pivot, it indicates an upward trend, when the price is below the pivot , it indicates a downward trend. When the price breaks through the pivot, the trend is reversed.

3. The red and blue thin curves in the Candlestick chart chart are technical indicators: Red line is  MA20+Bollinger bands, Blue line is MA50. under the Candlestick chart chart are also the technical indicators:  Blue line is RSI, Red line is 9MA;

4. The green horizontal line is the resistance level for a price increase, and is also the profit target for long orders; the red horizontal line is the support level for a price decrease, and is also the profit target for short orders.

How to use TC strategy？

1.[Pivot] is the reversal line of the market trend. When the price up the pivot line which means in Bullish, you can open a long position or Buy. on the contrary, when the price under pivot line which means in bearish. You ‘d better make short positions or Sell.

2. [our preference] is the main trading suggestion for your reference. You can exit your trading refer to this target or close positions before it.

3. [Alternative scenario] is the plan B for your reference.

4. [Comment] is the technical analysis of market trends and technical support for trading strategies.

5. [Supports and resistance] Supports are levels where the price tend to find support as it falls.

Resistances are levels where the price tend to find resistance as it rises. So, exit before the trend reverse.