The strengthening dollar caused crude prices to soften, with Brent crude headed for another test of support at $104/$105 per barrel. Failure of support would warn of a down-swing to $90, but breakout above the descending trendline is equally likely and would suggest a new primary advance.
* Target calculation: 105 – ( 120 – 105 ) = 90
The spread between Brent and Nymex WTI crude narrowed to $20. An increase in supply from Libya or Nigeria would help to lower Brent prices further.