VOT Research Desk
Nov 4
Analytics and Recommendations
- Brent crude’s upside is constrained by rising Treasury yields.
The fundamental background of Brent crude oil
Following a string of difficult days following the FOMC, the price of Brent crude oil is rising this morning as the U.S. Treasury yields have supported the upward movement of the dollar. Brent crude has held up rather well amid the soaring USD thanks to positive inventory data, such as the API and EIA weekly stock dumps.
The Non-Farm Payroll (NFP) data print, which is predicted to be 200K, is the main topic of discussion today. A report higher than 200K may cause Brent crude to trade lower by the conclusion of the business day, despite the weak association between ADP employment changes and initial unemployment claims. To conclude Friday’s activity, Baker Hughes rig position figures, which have been falling, should give crude price of oil some support if this pattern persists.
According to the current scenario, it shows money market pricing on Fed interest rate possibilities, the terminal rate has increased from a top of 5% in May just this week to 5.175% in June. Gains in crude oil should be constrained as a result of this, should it persist over the medium run. It will be fascinating to observe how OPEC+ responds to these new challenges when they meet in December and whether they consider further supply reductions.
Technical Picture
The 20 and 50-day EMA bullish crossover has kept the daily price of Brent Crude within the developing bullish channel. The relatively brief directional bias depends on the outcome of today’s NFP report, with a closure under 95.20 and also the 100-day EMA potentially neutralizing any positive momentum.
The RSI value is getting close to overbought area and may indicate that Brent crude is about to fall.
Key resistance levels:
98.00
Key support levels:
95.20/100-day EMA
