Brent Oil Update: Correction Completion and Growth OutlookUpdated the medium-term structure on Brent oil TVC:UKOIL FX:UKOIL ICEEUR:BRN1! NYMEX:CY1!
Currently, I see several scenarios for market development:
🥇 Base Scenario:
Correction unfolds as an A-B-C pattern, where wave C took the form of an Expanding Ending Diagonal (eED).
Although the diagonal does not look perfect geometrically, in terms of Fibonacci ratios, it is almost textbook:
Each subsequent wave is 1.618 the length of the previous one.
The price tested the monthly imbalance and retraced to the 0.382 Fibonacci level, increasing the probability of correction completion.
Thus, I believe the correction may have already completed, and we might soon see recovery and growth in oil prices. However, a minor retest or small deviation of the lows remains acceptable within this scenario.
🥈 Scenario 2:
Alternative wave count in the form of a Double Zigzag (W)-(X)-(Y).
Here too, the correction may have ended or may complete with a minor new low around the key support zone.
🥉 Other Alternatives:
Wave A — impulse, B — triangle, C — contracting Ending Diagonal (cED).
Alternatively, another expanding diagonal (eED) could finalize the downtrend.
⚡ Fundamental Drivers Supporting Oil Recovery:
Expected monetary policy easing in the U.S.:
Potential rate cuts and M2 money supply growth should boost demand for commodities.
Stimulus programs expected in China and India:
Industrial demand recovery from the world's largest consumers. Global demand remains resilient: Asia, emerging markets, and India's growing economy continue to support oil consumption, despite local slowdowns in Europe and the U.S.
Ongoing geopolitical risks:
Continued tensions in the Middle East and risks of supply disruptions could support oil prices.
OPEC+ production cuts:
The extended supply cuts maintain a structural shortage in the market.
Historically low commercial oil inventories in the U.S. and Europe:
A resurgence in demand could accelerate price recovery.
📍 Key Levels:
Support zone: 58–65 USD.
Maximum acceptable downside across all scenarios: 50–55 USD — I do not expect a dramatic drop below this zone.
🛡 Important:
The current phase is a transition: either the confirmation of a bottom formation or a final controlled retest of the 58–65 zone before recovery.
In all scenarios, I expect Brent oil to have either completed or to be completing its correction.
The base growth scenario remains a priority, watching closely for confirmation signals in the 58–65 USD range.
