Brent reached the lower boundary of the price range
Yesterday, our forecast was absolutely correct. The Brent crude hit a low of $39.22 during the trading session.
It looks like we were right. Investors do not know if the price of Brent crude oil is oversold or overbought. Yesterday the Brent crude oil reached the lower limit of the range $39.53 and resumed its growth.
It is also worth to note that the oil has no serious prerequisites for strengthening. Taking into account the start of the Easter holidays, and closed markets, the volatility of the oil has been quite predictable.
Now it’s interesting if the oil could resume its rise after the long weekend. There were rumors that Russia plans to increase the oil production to its maximum volume of 2013. This suggests that oversupply could become even more impressive.
It should also be noted that the renewed decline in oil rigs in the United States does not affect the Brent price. According to Baker Hughes, the number of operating drilling rigs fell by 15 in the US. Now only 372 rigs are working.
How to trade
Perhaps we will see a slight calm, but at the beginning of next week, the Brent will try to resume the growth and return to the upper boundary of the two-week range at around $42.50. Today we would buy CALL options if the price rises above $40.55. And we would buy PUTs if the price goes below $40.28
Expiry time: 21:00 GMT