Brent Crude Oil Price Update – Strengthens Over $57.97, Weakens Under $57.34

International-benchmark Brent crude oil plunged on Friday, but still managed to eke out a small weekly gain. Most of the strength last week was fueled by bigger than expected stockpile declines as reported by the American Petroleum Institute (API) on Tuesday afternoon and by the U.S. Energy Information Administration (EIA) Wednesday morning. The plunge is supply served as proof that the OPEC-led production cuts were working to reduce U.S. inventories. Putting pressure on crude on Friday were concerns over demand due to the potential impact of an approaching hurricane.

On Friday, December Brent crude oil futures settled at $58.46, down $1.32 or -2.26%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $60.34 will change the main trend to up. A move through $57.15 will signal a resumption of the downtrend.

The minor trend is also down. A trade through $59.94 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is $55.29 to $60.65. Its retracement zone at $57.97 to $57.34 has been acting like support since August 9.

The intermediate range is $64.45 to $55.29. Its retracement zone at $59.87 to $60.95 is resistance. This zone stopped the rally on August 21 at $60.34 and on August 28 at $59.94.

The main range is $66.50 to $55.29. Its retracement zone at $60.90 to $62.22 is major resistance.

Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at $58.46, the direction of the December Brent crude oil futures contract on Tuesday after the U.S. bank holiday on Monday, will be determined by trader reaction to the short-term 50% level at $57.97.

Bullish Scenario

A sustained move over $57.97 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for a retest of $59.87 and $59.94. Taking out these levels could lead to a test of $60.34.

Taking out $60.34 will change the main trend to up. This could drive the market into the next main top at $60.65 and the main 50% level at $60.90.

Bearish Scenario

A sustained move under $57.97 will signal the presence of sellers. This could trigger a break into the short-term Fibonacci level at $57.34 and the main bottom at $57.15. This is a potential trigger point for an acceleration to the downside with the next major target the August 7 main bottom at $55.29.