The commodity market intends to continue its rally. Early in February, Brent is looking pretty confident and trading above $93.45. At the moment, there are at least two triggers that push the Brent price upwards.
We’ve already discussed the first one recently – investors remain confident of the supply shortage in the commodity market, and that was confirmed after the OPEC+ meeting this month.
The alliance members can’t increase the daily output parameters as quickly as oil consumers want – that’s a pretty solid argument for bulls to continue buying oil.
Another reason is local but still quite strong. Weather conditions in Texas are worsening as the state is experiencing cold. Investors are concerned about possible delivery interruptions from the US, therefore they also continue buying.
Last Friday’s report from Baker Hughes showed that the Oil Rig Count in the US added two units, up to 497. However, this information is relatively neutral for the commodity market.
Technical View
In the H4 chart, having completed the ascending structure at $94.70, Brent is consolidating above $93.30. Possibly, the asset may break the range to the upside and resume growing towards $97.85.
After that, the instrument may correct to return to $93.30 and then form another ascending structure with the target at $101.00. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving above 0 inside the histogram area, thus indicating a further uptrend in the price chart.
As we can see in the H1 chart, after forming a new consolidation range around $92.10 and breaking it to the upside, Brent is growing with the short-term target at $95.40. Today, the asset may reach this target and then correct to return to $92.10.
Later, the market may resume trading upwards with the target at $101.00. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: after rebounding from 50 to the upside, its signal line is expected to continue growing and reach 80.
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.