Oil Remains Expensive

On Monday, December 7th, the price for oil remains high, though the market is looking for a reason for at least a minor correction. Brent is traded for 49.00 per barrel.

Near the end of the year, as a result of multiple online conferences, OPEC+ gathered the strength to decide upon an extension of quotas for the first quarter of 2021. The quotas will grow by 25% of the current levels. If producing countries decided upon it, they not only see a lobby here but also the probability of an increase in future demand for energy carriers.

For now, the market seems to neglect Joe Biden, the president who won the election. However, his time will come, and oil buyers might tread upon quite a few stumbling rocks.

On H4, Brent completed a wave of growth to 49.70. At the moment, the market is forming a consolidation range at the high of this wave. We expect an escape downwards and a declining wave to develop to 48.50. Upon reaching this level, another structure of growth to 50.20 is not excluded. Then a correction to 46.16 might begin. Technically, this scenario is confirmed by the MACD. Its signal line has escaped the histogram area and suggests a decline to zero. In the case of its breakaway downwards, the correction on the price chart might, indeed, continue to 46.16.



On H1, Brent is trading in a structure of correction to 48.50. After this level is reached, we expect a link of growth to 49.15. Thus the market will set new limits for a consolidation range. With an escape upwards, a pathway to 50.20 will open. With an escape downwards, a deep correction to 46.16 is not excluded.



By Dmitriy Gurkovskiy, Chief Analyst at RoboForex

Disclaimer: Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.