Brent oil strengthens, ignores Iran oil minister’s comments

Brent oil regained poise and clocked a fresh session high of $38.83 levels as traders ignored comments from Iran oil minister which indicate rise in oil supply in near future.

Eyes US supply data

That Iran is planning to boost its daily output to 4 million barrels per day is already a well known fact. Hence, comments from Iran oil minister did not trigger a fresh sell-off in oil. Nevertheless, this underscores the fact that oil supply glut is here to stay for a long time.

The focus now shifts to US government’s weekly inventory data. The API data released yesterday showed a surprise drawdown; hence traders are bracing up for a surprise bullish report.

Brent Technical Levels

The immediate hurdle is noted at $39.05 (head and shoulder neckline) above which prices could test $40.05 (rising trend line hurdle). On the other hand, a break below $38.32 (daily low) would expose $37.24 (previous day’s low).