Oil (WTI, Brent Crude) Evaluation

• OPEC’s demand forecast suggests tight oil market into yr finish
• Brent crude oil pulls again from resistance as bullish momentum subsides
• WTI crude oil checks trendline assist on newest dip
• The evaluation on this article makes use of chart patterns and key assist and resistance ranges. For extra data go to our complete training library

OPEC’s Demand Forecasts Recommend Tight Oil Market into Yr Finish

Yesterday OPEC launched its month-to-month report the place it revised international GDP development for 2023 and 2024 to 2.7% and a pair of.6%, up 0.1% respectively from final month’s evaluation. A greater-than-expected GDP development outlook bodes properly for oil bulls as considerations over the worldwide development slowdown ease. US GDP shocked massively in July whereas immediately UK GDP additionally got here out better-than-expected however stays at low ranges.

Nevertheless, the demand/provide dynamic for OPEC’s oil means that oil costs are prone to stay excessive into yr finish. In keeping with the most recent report, OPEC retains its oil demand forecast which sees development of 300,000 barrels per day (b/d) for Q2, 1.3 million b/d in Q3 and a pair of million b/d for the fourth quarter. All figures are in comparison with the identical durations in 2022.

OPEC’s 2024 demand estimates had been revised 100,000 bpd decrease to 30.1 million bpd, revealing a sizeable shortfall if provide had been to stay round present ranges (27.31 million b/d) in response to secondary supply estimates. Those self same sources estimate July manufacturing volumes dropped 836,000 b/d from June as Saudi Arabia’s cuts took impact to.

Decrease OPEC manufacturing is partially offset by file US manufacturing which is predicted to rise 12.76 million bpd in response to the Vitality Data Administration. As well as, the Worldwide Vitality Company studies file international oil demand in June of 103 million b/d warning of stock drawdowns into yr finish.

Supply: OPEC, S&P International, ready by Richard Snow

Oil Pulls Again from Resistance as Bullish Momentum Subsides

Brent crude oil costs traded up above $87.00 earlier than pulling again yesterday. The MACD and sign line trace at a possible bearish crossover after a powerful ascent. The broader uptrend has been supported by Saudi Arabia’s voluntary 1 million bpd lower which is over and above the present cuts agreed by the group with Russia additionally shaving round 500,000 bpd too.

With $87.00 a major degree beforehand, oil costs might consolidate right here because the week attracts to a detailed. Basic demand and provide components level in direction of elevated costs into the top of the yr. Attainable pullbacks from right here, convey $82 into focus.

Brent Crude Oil Every day Chart

Supply: TradingView, ready by Richard Snow

The weekly chart places the latest bullish advance into perspective, rising from ranges near $70, now approaching $90. The 31.8% Fibonacci retracement at $91.42 hovers above the zone of resistance at $90, doubtlessly halting bullish momentum for now. Costs are a way off the disaster Covid/Russia-Ukraine peak of $138 however given latest enhancements in inflation, there’s a sturdy incentive from US President Biden to maintain oil costs at a good degree.

Brent Crude Oil Weekly Chart

Supply: TradingView, ready by Richard Snow

WTI Crude Oil Pulls Again to Trendline Assist

WTI crude oil traded by way of $82.50 earlier than heading decrease yesterday. The steep slope of trendline assist portrays the spectacular rise of oil costs since July and now it comes underneath additional scrutiny. Consolidation at this degree seems seemingly heading into the weekend. A breakdown and shut beneath the trendline and the zone of assist opens up $77.40 as the subsequent degree of assist. Resistance seems at $85.70. The MACD hints at a momentum slowdown.

Supply: TradingView, ready by Richard Snow

— Written by Richard Snow for DailyFX.com

Contact and observe Richard on Twitter: @RichardSnowFX