22 Mar, 2024

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Brent Crude Oil News and Analysis

• Over 150 missiles and drones fired in latest attack on Ukraine
• Oil prices ease into the weekend despite attacks on energy infrastructure
• IG client sentiment focuses on recent changes in positioning to arrive at bearish bias
• The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library

Over 150 Missiles and Drones Fired in Latest Attack

Over the past 24 hours, the escalating conflict between Russia and Ukraine has taken a significant toll on energy infrastructure in both countries. In Ukraine, a series of Russian missile strikes targeted critical energy facilities resulting in at least five deaths and hitting a large dam.

The recent escalation has caused widespread power outages and disruptions to the country’s energy grid and is reportedly in response to Ukraine’s attacks during the Russian presidential election. The attacks have exacerbated Ukraine’s already precarious energy situation, as the country struggles to maintain adequate supplies for domestic consumption and industrial operations. These attacks have raised concerns about potential supply disruptions from both countries, which could further tighten the already strained global oil market. Russia, a major exporter of crude oil and natural gas , could face challenges in maintaining its already reduced export levels, while Ukraine’s energy crisis could lead to increased demand for imported resources from neighbouring allies.

Not too long ago, oil prices were on the rise after the International Energy Agency (IEA) revised its estimate of global oil demand in 2024. The potential ramifications of the recent strikes appear contained as the wider OPEC group continue to restrict supply.

Oil Prices Ease into the Weekend Despite Attacks on Energy Infrastructure

The oil market has not reacted in a massive way to the news over the past 24 hours of attacks on oil infrastructure. Oil prices reached a swing high on Tuesday as the RSI edged into overbought territory. Since then, oil prices have moderated and appear to be heading for a retest of the $85 marker that served as resistance -up until recently- since December last year.

Prices remain above the 200 day SMA which supports the medium-term uptrend but may require a bullish crossover for sentiment to stack up on the long side.

Brent Crude Oil Daily Chart

Learn the fundamental determinants of the oi price, like demand and supply, that are so crucial to the oil market:

IG Client Sentiment Backs Shorter-Term Bearish Move to Continue

Oil US crude (WTI) data is used below as a proxy for Brent crude oil sentiment data:

Oil – US Crude: Retail trader data shows 64.54% of traders are net-long with the ratio of traders long to short at 1.82 to 1 .

We typically take a contrarian view to crowd sentiment , and the fact traders are net-long suggests Oil – US Crude prices may continue to fall.

Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Oil – US Crude-bearish contrarian trading bias.