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Brent Crude – Oil steady today but momentum remains with the rally

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  • Brent rally cools after another strong week
  • Tight market continues to support price
  • No sign of technical divergence near $90 in Brent

Oil prices are a little flat today after rallying another 5% last week. Brent hit a new high for 2023 in the process and, despite paring earlier gains today, there still appears to be plenty of momentum in the rally.

That there is still plenty of momentum so close to $90 a barrel may suggest we could see a strong push to break above which would represent a big shift in the market dynamic in quite a short period of time.

Saudi Arabia and Russia have been managing additional voluntary cuts on a monthly basis and could withdraw them at any point but I can’t imagine they’ll be in any rush and risk sending the price tumbling again.

Can Brent break $90?

From a technical perspective, the most striking thing is the MACD and stochastic, both of which are continuing to trend higher alongside price.

BCOUSD Daily

Source – OANDA on Trading View

When approaching areas of resistance, divergences between price and these momentum indicators can indicate the trend is weakening but so far that isn’t clear.

Even on a lower timeframe chart, like the 4-hour, the last rally was matched with higher highs. So despite trading at the highest level this year and near $90, there is still plenty of momentum that could aid a powerful push against this resistance zone.

BCOUSD 4-Hour

Source – OANDA on Trading View

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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
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