OPEC may add to supply in weeks – Société Generale

Brent has broken a multi-year uptrend that indicates the risk of a deeper decline, note market analysts at Société Generale.

Oil price could drop to $70.00

“Brent has struggled to recover the 50-DMA in the recent rally attempt and has now breached a multi-year ascending line indicating the risk of a deeper decline. The daily MACD is at a higher level than last month, but signals of a significant rebound are not yet visible.”

“In August near $75/75.65 is the first layer of resistance. Failure to break above this could mean persistence in the downward move towards the December low of $72.30 and perhaps even towards $70.00. Brent crude’s drop below $74/bbl is disinflationary and follows reports that OPEC could add around 180,000 bpd of supply in a few weeks.