Brent Brent Brent

Brent Crude oil (LCOH2)– Technical outlook for 2022

KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank Group

Summary:  In the final quarter of 2021 Brent crude oil went through a correction phase before rallying strongly ahead of the year end and into the first days of 2022, thereby fast approaching its strong resistance at $86.75 per barrel. This is a level that represents the peaks from October 2021 and October 2018, and a break above is likely to pave the way towards the next strong area of resistance between $107 and $115 per barrel. The underlying trend is up, as illustrated by 21, 55 and 200 Simple Moving Averages all rising. In addition, a Relative Strength Indicator (RSI) above 60 is also supporting this uptrend.


For this longer-term bullish scenario to be reversed, another rejection at the $86.75 per barrel level of resistance could result in a move below the longer-term falling trend line, followed by a drop below the December 2021 low of $65.72 per barrel.  

Carbon (CFIZ2)

After a good run in November carbon got hit by a quick 20 percent correction in December, only to resume its uptrend during the last days of 2021. If carbon breaks above the November 2021 peak of €90.75 per tonne we could very well see it reach €102–108 during the first quarter of 2022. 

For carbon to demolish both the short-term and medium-term bullish picture, a daily close below the December low of around €73 is needed. There are a few warning signs, however, of a weakening of the uptrend. On the weekly time period there has been divergence since the mid-December peak and more pronounced divergence recently illustrated by the RSI, where higher weekly closing prices have not been supported by RSI strength. In fact, the RSI has fallen while carbon prices have rallied—a divergence that could indicate an imbalance in the market. However, the medium-term uptrend will remain intact as long as carbon prices stay above the mentioned support at around €73.

Explore Saxo’s products

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)

Saxo Markets
40 Bank Street, 26th floor
E14 5DA
London
United Kingdom

Support Centre
For existing clients, please click here to request support via the Support Centre.

Have a question about our products, platforms or services? Visit the Support Centre to find answers for our most frequently asked questions. If you are still unable to locate an answer to your question, you will also find contact details for your local Saxo office to speak with a representative.

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.