Brent oil drops to 5-DMA and recovers

Brent prices fell to 5-DMA level of $40.53/barrel, before trimming losses to trade around $40.80 levels on reports china’s oil imports rose to a fresh high.

Prices fell in Asia and remained on a weak footing in early Europe after data released on Friday showed US rig count rose for the first time since December. Energy firms added one oil rig after 12 weeks of cuts, according to data by industry firm Baker Hughes.

Hence, futures were down 1% in Asia, before buying interest recovered on reports China’s oil imports rose to record high. China's General Administration of Customs said today that February crude oil imports rose 24.4% from a year earlier to 31.8 million metric tons, equivalent to roughly 8 million barrels a day, the highest daily average on record.

Brent Technical Levels

The immediate hurdle is seen at 41.11 (daily high) followed by a resistance at 41.46 (Mar 8 high). A break higher would expose 42.19 (Aug 24 low). On the other hand, a break below support at 40.53 (5-DMA) would expose 39.50 (trend line support) and 38.12 (100-DMA).