Brent (OIL) launched a new week lower but has managed to quickly recover from losses. Vitol pointed that a drop in oil price below $100 would likely be an overreaction as current fundamentals do not warrant such low prices levels. According to Vitol, current price is reflecting negative factors, like the announced massive SPR release and potential demand weakening in China due to restrictions. Saudi Aramco will announce new export prices for Asian countries in the coming days. Given that a lot of consumers decided to avoid Russian crude, it is expected that new prices will entail a significant premium over Brent price, which may support further price gains.
Taking a look at the Brent chart (OIL), we can see that the price tested the lower limit of a triangle pattern but managed to recover since. A near-term resistance to watch is marked with a short-term downward trendline that acts as an upper limit of the triangle pattern. In theory, it is a continuation pattern and a break above the upper limit could trigger a stronger upward move.
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Source: xStation5
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