Brent and WTI crude oil prices rebound to test resistance

As markets have started to find near term reprieve from the initial shock within the global banking sector, risk appetite has begun to return in the short term.

Oil prices have found some further impetus for gains on the suggestion that Chinese demand of the commodity could reach record highs in 2023.

Traders will now be assessing whether the rebound in oil is the start of a more meaningful trend reversal or short term reprieve before longer term weaknes is continued.

Brent crude – technical view

A rebound from oversold territory has now started to manifest, with the price of brent crude oil now moving close to the 79.50-resistance level. The longer-term trend for crude oil does however remain down.

We are looking for a bearish price reversal before the 80.80 level for new short entries. In this scenario, 6950 would again become our downside support target, while traders might use a close above either the reversal high or the 80.80-resistance level as a stop loss indication.

Should we not get a bearish price reversal forming before the 8080 level, and instead see a close above this level, we would be looking for short entry on a bearish reversal closer towards the 87.70 level.

Only on a break above the 88.70 level (confirmed with a close) would we be reconsidering a long bias to trades on crude oil.

Brent crude – client sentiment

As of the 29th of March (1pm), 76% of IG clients with open positions on brent crude expect the price to rise in the near term, while 24% expect the price to fall.

WTI crude – technical view

As would be expected, movements in WTI crude (US crude) have been of a similar nature to that of brent.
We have seen a rebound from oversold territory to now test the 73.50-resistance level. The longer-term trend for WTI oil does however remain down.

We are looking for a bearish price reversal at the 73.50 level for new short entries. In this scenario, 69.20 would become our downside support target, while traders might use a close above the reversal high as a stop loss indication.

Should we not get a bearish price reversal forming before the 73.50 level, and instead see a close above this level (as could be happening at present), we would be looking for short entry on a bearish reversal closer towards the 80.90 or 82.50 level.

Only on a break above the 82.50 level (confirmed with a close) would we be reconsidering a long bias to trades on crude oil.

WTI crude – client sentiment

As of the 29th of March (1pm), 65% of IG clients with open positions on WTI crude expect the price to rise in the near term, while 35% expect the price to fall.