Brent Crude Oil Faces Multiple Challenges: What's Next?
Andrey Goilov | Nov 27, 2023 06:01AM ET
The Brent crude oil market is currently navigating a complex landscape, reflected in the recent decline in prices. On Monday, the price of Brent crude fell to $79.95 per barrel, indicating a notable lack of confidence among investors in OPEC+, the coalition of oil-producing countries.
Several factors contribute to this downturn in the crude oil market. These include diminishing geopolitical risks in the Middle East, which have historically been a major driver of oil prices, and a lackluster performance in the U.S. drilling sector. The American drilling industry's slow pace is affecting global oil supply dynamics, further complicating the market situation.
Market analysts are closely monitoring the upcoming OPEC+ meeting, scheduled for November 30. This meeting is critical as key oil producers are expected to discuss and potentially agree on a new production policy for the first quarter of 2024. Earlier tensions among some OPEC+ members had sparked market reactions, suggesting uncertainty in the coalition's decisions. However, recent reports have downplayed these disagreements, indicating they may not significantly impact the group's global decision-making process.h2 Technical analysis of Brent Crude Oil price charts/h2
The technical analysis of the Brent H4 chart reveals a significant consolidation pattern forming around the $80.50 mark. A Triangle pattern is becoming increasingly apparent in this context. Based on current trends, a rebound from the lower boundary of this pattern is possible, potentially leading to an increase to the $83.25 level. Should this level be breached, the market might experience a surge, pushing prices up to $88.20. This bullish scenario is corroborated by the Moving Average Convergence Divergence (MACD) indicator, whose signal line is hovering near zero and is oriented downwards.
In contrast, the H1 Brent chart shows a descending structure moving towards $79.30. Upon reaching this level, the market may witness a rise to $83.25, followed by a potential correction to $82.00, and then another increase to the $83.25 level. This constitutes a short-term target. Supporting this forecast is the Stochastic oscillator, with its signal line positioned below 20 and directed upwards, suggesting the possibility of new highs in the near term.
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