Brent returned to the long-term uptrend in December and a lot of oil positive news pumping the price since then. Despite OPEC’s quota increase, 14 of the 18 countries fell short of their quotas which increase the questions about production capabilities for further supply. The Omicron variant did not affect the economy as feared. Reduced production because of Kazak unrest. Libya had some production issues and now Houthis attacking UAE oil tankers. All the news carry oil to new highs since 2014.
Now Brent is pricing in overbought RSI territory which is not mean the price increase is over, however. Today, oil breakout is over 86.70. If the price can hold above, over 90 is a high possibility. The last 2 times when RSI move past 70, the price rose another %4.33 and %5.73 before entering a downtrend. IF this pattern repeats itself, 90-93 zone can be a good target for a top. Of course, if oil positive news keeps coming, a move to trend’s upper band is also another possibility.
If looking at the hourly chart, Brent is not only in an uptrend in the long term but in the short and medium-term as well. Currently (will increase because of positive sloped trend) 89.13 – 86.70 – 84.90 are the major supports and 89.45 – 91.25 – 102.30 are the major resistances. News about the middle east tensions, Iranian atomic deal, low oil stocks, and production quotas news should be followed for further price moves.