Brent crude looks to retest $108

Pending the resumption of Libyan oil exports, Brent crude prices have been choppy.

Last week saw Brent prices crash through the previously supportive $106 level, and in quick order test support down at $104. Having dropped almost $4 in just over 48 hours of choppy trading, oil traders have taken less than a week to break back above $106.

The market is poised for a resumption of oil exports from Libya now that an agreement has been reached with rebels over access to one of the country’s major ports. Prior to all of the troubles that Libya had suffered in the last couple of years, it was one of the larger oil exporters. This development with access to the ports should see Libyan oil exports almost triple. At the same time as the possibility of increased supply to the market, the spot price has found itself trying to break through the 50-day moving average just below $108 and the 200-DMA just above.

Although developments in Libya will increase market supply, it has been a situation the markets have been aware of for a while and as such should broadly be factored in. If the Brent crude price can close above the late-March high of $108.07, then it would give us more confidence that it can maintain its current trajectory.

Brent crude chart

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.