Brent crude declined about $3 from its opening price on Thursday, Mar. 31, following reports that the American government might release a million barrels of reserves daily. Meanwhile OPEC+ agreed as expected to boost production by another 400,000 barrels daily. Despite continuing ceasefire talks between Russia and Ukraine, the former is building up its forces in eastern Ukraine.
From a fundamental point of view, it seems difficult for oil to continue upward beyond the latest high. Many governments have shown willingness to intervene to attempt to drive prices down, while the current value of crude is a strong incentive for most producers to pump more if they can.
The chart might suggest consolidation, with no signal of saturation and ATR having declined significantly from its peak around the middle of March. The 50 SMA around the key psychological area of $100 is likely to be critical support into April, while the main round number above is $120.
This might cap any short-term gains. Overall, a range being established in the coming weeks seems fairly likely unless there’s some significant confirmed information from the Russo-Ukrainian talks or the outlook for supply changes dramatically.