Brent Crude Oil Price Update – Headed to Multi-Year Lows if $50.31 Fails as Support

International Brent crude oil futures opened flat in Monday’s pre-market session. There weren’t any major news events over the week-end so we expect to see a quiet start to the week. However, heightened volatility in the stock market could have an impact on the price action throughout the week. On January 1, the OPEC-led production cuts are scheduled to begin. However, we’re not likely to see any impact on supply for several weeks.

Last week, March Brent crude oil futures settled at $53.21, down $0.89 or -1.67%. Earlier in the week, the market hit a multi-month low at $50.31. At 0205 GMT, the market is trading $53.30, up $0.09 or +0.17%.

Weekly Swing Chart Technical Analysis

The main trend is down according to the weekly swing chart. A trade through $50.31 will signal a resumption of the downtrend.

The main trend will change to up on a trade through $85.45, however, this is highly unlikely. Due to the prolonged move down in terms of price and time on the weekly chart, this week begins with the market in the window of time for a potentially bullish closing price reversal bottom. If formed and confirmed this week, we could see the start of a 2 to 3 week countertrend rally.

The minor trend is also down. A trade through $63.91 will change the minor trend to up. This move will also shift momentum to the upside.

The short-term range is $63.91 to $50.31. Its retracement zone at $57.11 to $58.71 is the primary upside target. Since the main trend is down, we could see sellers show up on the first test of this zone.

The main range is $85.45 to $50.31. Its retracement zone at $67.88 to $72.03 is the second upside target.

Weekly Swing Chart Technical Forecast

Last week, the March Brent crude oil futures contract closed in the middle of its trading range.

If sellers take control early then look for a break into last week’s low at $50.31. This is followed closely by another main bottom at $49.16. If this bottom fails then look for the selling to extend into the next long-term main bottom at $47.28. This bottom is a potential trigger point for an acceleration to the downside with $42.99 the next major target price.

If the buying this week is strong enough to take out last week’s high at $55.58 then look for a potential surge into the retracement zone at $57.11 to $58.71. Sellers could show up on the initial test of this zone.

Finally, a move through $50.31 then a higher close will form a potentially bullish closing price reversal bottom on the weekly chart.