Brent oil is expected to jump over the neutral zone of $118.87 to $120.66 per barrel, extending its gains to $122.25 per barrel.
The decrease from Monday’s high of $121.95 is being categorised as a retreat towards an inverted head-and-shoulders pattern, with a target of $123.91.
From a strategic standpoint, the aim will only be reachable if oil maintains a solid hold over a resistance level of $120.66.
Read More: Why US oil price has caught up with Brent
A break below $118.87 might lead to a range of $117.35-$117.80. The black candlestick on Monday on the daily chart indicates a brief loss of bullish momentum. A retracement analysis identifies a $118.03 to $123.01 neutral zone.
A break above $123.01 will affirm the uptrend’s continuance to $139.13, while a breach below $118.03 could lead to a dip to $113.05.
Why Brent oil is usually dearer
Prior to 2008, WTI was generally more expensive than Brent. However, a decline in the North Sea output combined with a boom in oil extracted from US shale rock saw the contracts switch places.
There has usually been a difference of only a few dollars between the contracts, while pricing is generally influenced by similar factors.
Read More: Support growing to add WTI oil to Brent benchmark to improve liquidity
“Brent tends to be slightly more expensive than WTI given that it is a more global benchmark, covering a much wider geography and is a broader indicator of worldwide oil prices,” said Victoria Scholar, head of investment at Interactive Investor.
There are additionally higher transport costs and greater supply risks for Brent. WTI traded at $112.70 per barrel on Friday, slightly above Brent at $112.55.
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