Brent Crude just gave my first buy signal since March 2022TECHNICALS:
We’re looking at the daily chart of Brent Crude oil.
We can see since March 2022, the price has indeed tanked from $136 down to $71.
During that time, we can see it’s formed a large Descending Triangle pattern.
This is generally a pattern which also forms what looks like a falling triangle.
The selling is stronger than the buying. And this is what brings the price down.
The $71 price however, is the crucial support (floor level) that’s been holding since 2021.
Each time it touches this level, the price tends to bounce back up.
Recently, the Brent Crude price has broken up and out of the Descending Triangle. This tells me the buyers are back and so is demand for the market.
The first target will be half way between the Descending Triangle’s high at $100.
Once we break that psychological $100 mark, I’ll be sure to send you the next prediction for Brent Crude.
FUNDAMENTALS:
It’s been a long and depressing time for the black gold commodity.
We’ve seen the price drop from $135 down to $71.00, over the last two years.
But now, Brent Crude is stealing the limelight.
With the impending oil shortages to the soaring global demand – the trend is finally changing.
In this article, we’ll go through the three main reasons why I expect Brent
Crude to rally back to its $100 mark.
Reason #1: The big shortage of oil
A key driver of why Brent Crude is ready to rally, is due to the recent prediction by the International Energy Administration (IEA).
They have stated there is an imminent oil shortage.
In fact, the IEA has warned the shortage in oil will materialize in the second half of 2023.
We could see demand potentially outpace supply by around 2 million barrels a day.
Also, Saudi Arabia, who is the world’s biggest crude exporter, has said it will prolong its reduction in oil production by 1 million barrels per day into August 2023.
This extension has followed from their sudden decision to reduce an additional million bpd for July.
Then we have Russia and Algeria who will also lower their August output and export levels by 500,000 bpd and 20,000 bpd.
And so, based on this, we’ve seen oil prices rise by over 5.29%.
This scenario leads me to believe oil prices are likely to climb for the following reasons:
1. Supply Disruption
First, with Saudi Arabia deciding to cut production, they are limiting the amount of oil available in the market.
When there is a lower supply, there is a ride in demand. And this puts upward pressure on oil prices.
2. OPEC Influence on other members
We know Saudi Arabia is a leading member of OPEC (Organization of Petroleum Exporting Countries).
And when they make a decision, this often sways other global oil markets to follow along.
This can result in other OPEC+ members to decide to cut their production.
And this lower supply, and increased demand will help increase the price of oil.
Reason #2: Goldman Sachs makes its prediction
Goldman Sachs has also spoken.
It has lifted its forecast for Brent to $95 a barrel, by the end of the year.
And raised its price prediction to $100 for 2024, based on the oil output change.
