Chart of the day - OIL (06.05.2021)

Brent (OIL) reached the highest level since March 15, 2021 yesterday and tested $70.00 area. DoE Report released yesterday confirmed a massive drop in US oil stockpiles signalled by API data on Tuesday. While economic recovery in Europe, United States and China is a positive factor for oil prices, a very severe pandemic situation in India is a source of concern for bulls. India is one of the largest oil importers in the world. While Indian government is slow to impose any far-reaching restrictions, it may be forced to do so should the situation continue to deteriorate.

Taking a look at OIL from a technical point of view, we can see that the price pulled back after a failed attempt of breaking above the $70.00 area. Correction was halted near the previous local high and a recovery attempt can be spotted today. The aforementioned $70 area is a key resistance to watch in near-term. Should declines resume, key support can be found in the $66.00-66.50 area, where previous price reactions, the lower limit of the Overbalance structure as well as the upward trendline are located.