A four-week bull run and a clear breach of weekly trend resistance led to a Friday five-month peak of $82.63 but the oil price is now stalling ahead of big technical hurdles.

Much depends on a lasting ceasefire in Gaza after a 15-month Hamas-Israel war, clarity on Donald Trump’s policy agenda, and plans for ending the Russia-Ukraine war. Trump could relax curbs on Russian oil exports for an accord on Ukraine and this along with the Middle East ceasefire could lean on the oil price.

The outgoing Biden administration hit Russian oil in the toughest sanctions yet in a bid to give Trump some Ukraine leverage. Friday’s sanctions triggered last week’s 1% Brent rally but until there is clarity on Trump’s plans, consolidation in the oil price ahead of key levels is likely.

A long upper candlestick shadow was recorded on last week’s Brent chart. The shadow hinted at demand fade and, coupled with a close back below the 100-week moving average, set up a softer start to this week.

Weekly resistance just above the $82.63 Jan. 15 high is at $83.20 and $83.24 = a 61.8% Fibonacci retracement and Ichimoku cloud base, respectively. Further barriers are provided by the 200-week moving average at $84.41 and Ichimoku cloud top at $84.99.
Source: Reuters