Prices for benchmark Brent crude oil continue to decline amid an ambiguous market reaction to the attack of the Israeli tanker Mercer, trading around the level of $72.75 per barrel.
After a short period of calm, volatility comes back to the oil sector, which caused the current downward movement. Hopes that sanctions against Iran will be lifted, and the country will significantly increase the supply of "black gold" to the market almost collapsed after Friday's incident in the Indian Ocean, when an Israeli tanker was attacked again by unmanned aerial vehicles, and the United States, Great Britain and Israel have already rushed to blame Iran for the attack. The Canadian authorities have called for bringing official Tehran to justice. Thus, the probability of lifting sectional restrictions from the Islamic Republic has fallen to almost 0, which does not allow us to hope for an increase in supply on the market due to cheap Iranian oil.
Taking into account the factor of significant pressure on the asset quotes of concerns about the rapid spread of the coronavirus strain "delta", the probability of an increase in quotations should be considered as quite low. Investors will continue to monitor inventory data from the American Petroleum Institute (API) and the Energy Information Administration (EIA) to assess the current balance of supply and demand. And, according to analysts, stocks may start to decline again.
Support and resistance levels
On the global chart, the asset continues to trade within the global ascending channel. Technical indicators have already issued a buy signal, but it is still quite weak: the fast EMAS of the alligator indicator crossed the signal line from the bottom to the top, and the histogram of the AO oscillator moved into the buy zone.
Support levels: 71.00, 67.10.
Resistance levels: 75.10, 77.40.
Thus, the analysis and forecast of oil prices for August 4-5, 2021 in the event of a continued decline in the asset, as well as the price fixing below the local support, at 71.00, it is important to open positions for sale with a goal at 67.10. The stop loss should be located around 72.00. The implementation period: 7 days or more.
In the event of a reversal and continued growth of the asset, as well as the price fixing above the local resistance level at 75.10, buy positions with a target of 77.40 will be relevant. The stop loss should be set around 74.00.