Brent oil: Off three-week highs, but remains above key support

• Brent oil has backed off from three weeks highs above $61.00 hit on Wednesday.  
• Prices are holding above the 50-day average support.  
• Upside could be capped by a slowdown in the major oil-importing nations.  

Brent Oil has pulled back from three-week highs registered on Wednesday but is holding well above the 50-day moving average (MA) at $60.53.  

The black gold rallied by 2.55% on Wednesday, the biggest single-day gain since Sept. 4, on a surprise drop in the US crude inventories.  

The US Energy Information Administration reported that oil inventories fell by 1.7 million barrels for the week ended Oct. 18 – the first drop in six weeks. Further, oil supplies from the US Strategic Petroleum Reserve fell by 1 million barrels for the week ended Oct. 18.  

Markets were expecting an increase in inventories by 4.7 million barrels.  

The better-than-expected data pushed oil higher to $61.28, a level last seen on Sept. 30. As of writing, a barrel of Brent is changing hands at $60.74.  

Looking forward, Brent could rise to $61.68 (100-day MA) if the ongoing pullback reverses from the 50-day MA support. That said, observers believe the upside is limited, as big oil importers like China, India, South Korea, and Japan are witnessing an economic slowdown.  

Technical levels