Upticks in ICE Brent and WTI crude prices likely to remain limited
Quotes from Standard Chartered:
-Upticks in ICE Brent and WTI crude prices are expected to remain limited, and losses below the recent lows are favoured to follow. There is some upside risk, as the topping patterns could turn into bull flags.
-While this is possible, we expect nearby resistance to hold and new bear-cycle lows to follow. The ICE gas oil/Brent crack spread is turning higher, but sustained gains above USD 18.00/barrel (bbl) and USD 18.69/bbl are needed in order to confirm the basing pattern and leave gains to USD 28.00/bbl and higher to follow.
-The ICE Brent contract is expected to see upticks remain constrained, which will leave the focus on losses to follow. Resistance at USD 114.70/bbl is important to hold, as sustained gains above this level would leave a potential bull flag pattern unfolding instead.
-This would leave USD 116.60/bbl (the 8 September 2011 high) attracting next, and open the door for further gains to USD 121.00/bbl and higher.
-If resistance at USD 114.70/bbl can hold off upticks, as expected, look for the focus to remain on losses to press USD 107.31/bbl again (the 20 October 2011 low). Further dips to USD 98.74/bbl (the 9 August 2011 low) are then expected to follow.
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