On Monday, oil prices fell as concerns about weak economic growth in China, the world's top oil importer, trumped worries about supply disruptions due to a potential EU ban on Russian crude exports. Libya's National Oil Corp said it would temporarily resume operations at the Zueitina oil terminal to reduce its storage tanks in order to avert an "imminent environmental disaster" at the port.
Brent is consolidating in a symmetrical triangle pattern, with traders waiting to see how slowing down economic growth in China and the US can affect market demand in the second half of 2022. The oil market is trading in a continuous pattern, and its new direction depends on which side of this pattern breaks.
After hitting the upper edge of the range at around $110, sellers drove the price lower towards the 50-day EMA. Monday trading seems to be set for bears to extend the decline below this hurdle by gaining further momentum. If this level doesn't hold support, the next barrier would be estimated at around $99-sub, which lines up with the lower edge of the pattern. Investors will likely be waiting for more clues from the Opec+ meeting this week, which could cause the price to pull back from the triangle's dynamic support. As selling pressures increase, Brent could fall below $99, moving towards the lower support level in the 94-95 area. With a sustained move below this barricade, sellers will be aiming for $91 per barrel in the short term.
On the flip side, if buyers keep their ground within the triangle pattern, the price movement may point north toward the pattern's upper line. Bulls will be more on their toes if this level is successfully broken, setting them up to claim the peak of April 18 at $114. A persistent move higher above this hurdle could bring $120 into focus.
Momentum oscillators reflect a mixed picture right now. No directional sign is visible on the RSI, which is floating in neutral territory. Momentum is pointing down after pulling back from its 100-baseline in the selling area. In addition, MACD bars are attached to zero, implying that there is no effective move in either direction.
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