Brent Oil: Long-term bearish trend reversal?

Brent Oil dropped on Monday after the prices breached the rising trend line (drawn from Feb 2016 low and Nov 2016 low) support on Friday. 

As of writing, Brent was trading at $52.40/barrel; up 27 cents or 0.52%. Prices dropped for the sixth straight session on Monday. 

Oil operating on the slippery floors

The failure at the trend line resistance goes well with the fact that the fundamentals and sentiment remains weak. Moreover, it is ingrained in the minds of the traders that a barrel taken off by the OPEC ends up funding Shale producers. 

Thus, OPEC’s efforts to support prices by cutting output fail to have a long lasting effect on the prices. 

There is more evidence that investors are losing confidence in the oil rally. Hedge funds have slowed their net-long builds, a sign of waning confidence in higher oil prices. 

As of now, fundamental and technical factors are pointing to a major bearish trend reversal. The only factor that could boost prices is a sudden drop in the US inventories and/or rise in geopolitical tensions.