Brent Crude Oil Price Update – Strengthens Over $65.80, Weakens Under $65.44

International-benchmark Brent crude oil futures are trading lower early Wednesday after surging more than 1% in the previous session after a U.S. industry report showed an unexpected build in crude stocks. However, gains were limited by hopes for firmer demand in 2020 in response to the trade deal progress made by the United States and China.

At 06:54 GMT, February Brent crude oil is trading $65.69, down $0.41 or -0.62%.

U.S. crude inventories climbed 4.7 million barrels in the week to December 13 to 452 million, compared with analysts’ expectations for a draw of 1.3 million barrels, data from industry group the American Petroleum Institute showed.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through $66.23 will signal a resumption of the uptrend. The main trend will change to down on a move through $60.30. This is highly unlikely, however, there is room for a normal 50% to 61.8% correction.

The minor trend is also up. The minor trend will change to down on a trade through $63.01. This will shift momentum to the downside.

The main range is $70.69 to $55.35. Its retracement zone is new support. This zone is controlling the longer-term direction of the market.

Daily Technical Forecast

The direction of the February Brent crude oil market on Wednesday is likely to be determined by trader reaction to the uptrending Gann angle at $65.80 and the downtrending Gann angle at $65.44.

Bullish Scenario

A sustained move over $65.80 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a retest of $66.23. Taking out this level could trigger an acceleration to the upside with the May 16 main top at $68.50 the primary upside target.

Bearish Scenario

A sustained move under $65.44 will signal the presence of sellers. The first downside target is the main Fibonacci level at $64.81. Watch for a technical bounce on the first test of this level. This price is also a trigger point for an acceleration to the downside.

Side Notes

At 15:30 GMT, the U.S. Energy Information Administration will release its weekly inventories data. It is expected to show a 1.8 million barrel decline. Coming in as expected or better could erase the early loss and extend this week’s rally. If the report shows a build then look for further weakness.