BRENT CRUDE OIL: YESTERDAY’S RAPID CORRECTION ALLOWED THE QUOTES TO RETREAT FROM FEBRUARY LOWS

Current trend

During the Asian session, Brent Crude Oil showed ambiguous dynamics, remaining close to 82.00. Yesterday, the price retreated from the lows of February 26 amid anticipation of the publication of key American macroeconomic statistics.

According to preliminary estimates, the consumer price index in February will accelerate from 0.3% to 0.4% MoM and remain at 3.1% YoY. Core inflation, excluding food and energy prices, may slow from 0.4% to 0.3% MoM and from 3.9% to 3.7% YoY, in which case, the dollar will again be under pressure as it will mean that the US Federal Reserve is getting closer to start interest rates cut.

Meanwhile, fears of geopolitical risks and declining global energy demand have a negative impact on the asset. Thus, negotiations on a ceasefire between Israel and representatives of the Hamas movement were unsuccessful, and the conflict in Eastern Europe also shows no signs of de-escalation.

According to Reuters, a comparison of reports from the International Energy Agency (IEA) and OPEC since 2008 showed that the organizations differ in their assessment of the market situation development: in February, IEA experts said that in 2024, oil demand will increase by 1.22M barrels per day, while the OPEC forecast suggests an increase of 2.25M barrels per day. It leaves the difference of 1.03M barrels per day, the high for that period, and agencies are sending different signals to traders about the strength of the oil market in 2024 and over the long term, about the speed of the transition to clean fuels.

Support and resistance

On the daily chart, Bollinger Bands are moving flat: the price range remains virtually unchanged, remaining quite spacious for the current market activity. The MACD indicator is declining, maintaining a poor sell signal: the histogram is below the signal line. Stochastic remains horizontal, located close to “20”, and it is better to wait for the signals from the technical indicator to be clarified.

Resistance levels: 82.00, 82.40, 83.14, 84.00.

Support levels: 81.00, 80.00, 79.12, 78.00.

Trading tips

Long positions may be opened after a breakout of 82.40 with the target at 84.00. Stop loss – 81.60. Implementation time: 2–3 days.

Short positions may be opened after a rebound from 82.40 and a breakdown of 82.00 with the target at 81.00. Stop loss – 82.50.