UK Brent Oil hinting bullish sentiment as oil supply is set to drop

The impact of the sanctions on Russia’s crude oil is still very much an important issue that is still playing out. Alongside UK’s EU allies, the EU and their G7 partners have placed a ban on Russian crude oil between on December 5th 2022 and Russian refined products yet to be banned on February 5th 2023.

This means the UK will prohibit the import, acquisition, supply and delivery of Russian oil and refined oil products into the UK. This ban will potentially have a shock on UK Brent Oil’s price, and possibly see an appreciation in the long run due to lack of supply.

UK Brent Oil – Daily timeframe – December 21st 2022

Chart prepared on TradingView by Zorrays Junaid

We can see from this daily chart that since February 2022, the price of UK Brent Oil has been depreciating within this descending channel. On December 9th 2022, shortly after the Russian oil ban the price of UK Brent Oil bounced off the lower bound of the descending channel of this whole corrective cycle.

On top of that, we can see that price is also breaking through a bearish trendline which was supporting the recent bearish cycle since November 7th 2022 high which eventually broke through 83.718 lows. A break of the trendline will support the bullish price action this chart is hinting.

Let’s zoom in a little bit more to see how the most recent price action unfolded.

UK Brent Oil – Hourly timeframe – December 21st 2022

Chart prepared on TradingView by Zorrays Junaid

From the lows of December 9th 2022, we can witness a 5 wave Elliott Wave sequence to the upside with wave 5 as the extended wave. This is an impulse wave, and an impulse wave is usually the trend supporting wave. Therefore, if price is held above the 75.0 key level lows, we can expect UK Brent Oil continue to appreciate to the upside.

— created By Zorrays Junaid