Brent Crude Oil: Navigating the Waves of Global Influence and Price Volatility
Those of you who know me know of my passion for financial markets, both traditional finance and, in recent years, decentralized finance. Today I bring you an article about oil, specifically about British oil, called Brent. Commodities trading has always fascinated me, and working on oil futures, without physical delivery, for trading, has been one of the operations that has aroused the most interest in me.
Let’s learn about oil and its current situation on a technical level with this article.
Brent crude oil is a major trading classification of sweet light crude oil that serves as a major trading benchmark for worldwide oil markets. It is extracted from the North Sea, specifically from the Brent oilfield, which is located in the North Sea off the coast of the United Kingdom.
Here are some key points about Brent crude oil:
Geographical Origin: Brent crude oil is named after the Brent oilfield, which is one of several oilfields in the North Sea. The other major trading classification is West Texas Intermediate (WTI), which comes from the United States.
Quality: Brent crude is considered “sweet” because it has a relatively low sulfur content, making it easier and less costly to refine into products like gasoline and diesel fuel. It is also considered “light” because it has a relatively low density, meaning it flows easily.
Benchmark: Brent crude oil serves as a benchmark for pricing other crude oils worldwide. The prices of many other types of crude oil, as well as petroleum products, are often indexed to the price of Brent crude. It is a key reference point for the international oil market.
Contracts: Brent crude oil is traded on the Intercontinental Exchange (ICE) and the London Mercantile Exchange (NYMEX). Futures and options contracts for Brent crude are widely used by traders and oil producers to manage price risk.
Global Influence: Because of its status as a global benchmark, fluctuations in the price of Brent crude oil can have a significant impact on global oil prices, which in turn can affect fuel prices for consumers and the profitability of oil companies.
Price Volatility: The price of Brent crude can be highly volatile and is influenced by various factors, including supply and demand dynamics, geopolitical events, economic conditions, and weather-related disruptions in oil production.
Historical Significance: Brent crude has been a crucial benchmark for decades, and its price is closely watched by governments, energy companies, and financial markets worldwide.
TA for Brent
Long Term Brent
The long term for Brent has been a real roller coaster. Extreme volatility movements have taken him to heaven and hell. Even at almost 0, in the year 2020. It is important to understand that geopolitical factors have a really high influence on this commodity, since governments put pressure by adding and removing supply, at their convenience and their strategic chess games, to get what they want. Governments are the first players in the rise and fall of their own price. The Arab countries have thus managed to literally become rich. Although the US A and Russia also have oil, the Arab game and OPEC (Venezuela included) have moved the price a lot. The case of Venezuela and its hyperinflation, and everything that happened, will be discussed in another article, since there are other factors here apart from oil.
In summary, the long-term Brent oil TA indicates that in the future, this gigantic laterality will continue with movement to the sky and the ground. Tightening the belt tightly in the long term is more than mandatory, therefore putting pressure on trade, consumption and global inflation itself.
Short Term Brent
What to say for the short term… situation of great upward movement 2020/2022, with extreme verticality, to fall to relevant support and now… in areas of perhaps descending maximums to stop rising in the short term, perhaps, and take profits.
It appears to be locked in for the last year, in a triangle of possible redistribution following the giant bullish move from almost 0. So, at current prices, it is more than possible that the price has found the top of the triangle. A descending roof.
Being in the area of 92 USD per barrel, and without exceding around 100 USD, the logic (which in oil is sometimes difficult to find), is to return to around 70, or an approximate area.
RSI for Brent
Important, and where many great trading gurus despise the relative strength of a price, others like me, maintain the essence of what is important. Accelerating the RSI, with the opening situation (not closing) at 12 instead of 14 (it can be configured as desired and here I choose), the strength indicator indicates a possible approach to strength resistance, in areas of 70.
A sign at least to take into account that if it does not fall now, it will do so sooner rather than later, since although we observed in the past how the RSI even went to areas of 80, it will not always do so, and the 70s or nearby area, it could well be the turning zone, pay close attention to my words.
And as always, talk to your financial advisor, this is not an investment recommendation in any case.