Brent Crude Oil Price Update – Strengthens Over $61.61, Weakens Under $60.95

International-benchmark Brent crude oil futures closed higher on Friday amid worries over a supply disruption due to the political and economic turmoil in Venezuela. Gains were limited, however, by concerns over rising U.S. fuel inventories and a global economic slowdown. Despite Friday’s gains, Brent crude shed 1.72% for the week, while posting its first weekly decline in four weeks.

On Friday, March Brent crude oil futures settled at $61.64, up $0.55 or +0.89%. For the week, the market finished $1.06 lower.

The price action suggests short-covering fueled the rally. Talk of a supply disruption rattled some of the weaker shorts, while the stronger short-sellers felt the problem was not as serious at this time. Furthermore, some crude oil bears felt that any short-term disruptions to Venezuelan supply due to possible U.S. sanctions, would likely be offset by record U.S. production.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, the upside momentum seems to be waning as the market hovers just under a major top at $63.91.

A trade through $62.99 will signal a resumption of the uptrend, while a move through $63.91 will likely trigger an acceleration to the upside. The main trend will change to down on a move through $58.91.

The main range is $63.91 to $50.31. Its retracement zone at $58.71 to $57.11 is support.

The intermediate range is $58.91 to $62.99. Its 50% level or pivot is $60.95.

The short-term range is $62.99 to $60.22. Its 50% level or pivot is $61.61.

The market straddled these two pivot on Thursday and Friday.

Daily Swing Chart Technical Forecast

Based on Friday’s price action, the direction of the March Brent crude oil market on Monday is likely to be determined by trader reaction to the pivots at $60.95 and $61.61.

Bullish Scenario

A sustained move over $61.61 will indicate the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into the main top at $62.99. Taking out this level could extend the rally into the next main top at $63.91.

Bearish Scenario

A sustained move under $60.95 will signal the presence of sellers. This could trigger a break into the low at $60.22. This is a potential trigger point for an acceleration into the main bottom at $58.91 and the main Fibonacci level at $58.71.