Oil (WTI, Brent Crude) Evaluation

• OPEC’s demand forecast suggests tight oil market into 12 months finish
• Brent crude oil pulls again from resistance as bullish momentum subsides
• WTI crude oil exams trendline help on newest dip
• The evaluation on this article makes use of chart patterns and key help and resistance ranges. For extra data go to our complete training library

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

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

Nonetheless, the demand/provide dynamic for OPEC’s oil means that oil costs are more likely to stay excessive into 12 months finish. Based on the most recent report, OPEC retains its oil demand forecast which sees progress of 300,000 barrels per day (b/d) for Q2, 1.3 million b/d in Q3 and a couple of million b/d for the fourth quarter. All figures are in comparison with the identical durations in 2022.

OPEC’s 2024 demand estimates have been revised 100,000 bpd decrease to 30.1 million bpd, revealing a sizeable shortfall if provide have been to stay round present ranges (27.31 million b/d) based on 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 document US manufacturing which is anticipated to rise 12.76 million bpd based on the Vitality Data Administration. As well as, the Worldwide Vitality Company studies document international oil demand in June of 103 million b/d warning of stock drawdowns into 12 months 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 minimize which is over and above the prevailing cuts agreed by the group with Russia additionally shaving round 500,000 bpd too.

With $87.00 a big stage beforehand, oil costs might consolidate right here because the week attracts to an in depth. Basic demand and provide components level in direction of elevated costs into the tip of the 12 months. Potential pullbacks from right here, carry $82 into focus.

Brent Crude Oil Day by 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 stage.

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 help portrays the spectacular rise of oil costs since July and now it comes below additional scrutiny. Consolidation at this stage seems probably heading into the weekend. A breakdown and shut under the trendline and the zone of help opens up $77.40 as the following stage of help. 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