Brent oil is falling again

The commodity market, struggling to maintain its upward momentum, frequently slips into sales. On Thursday, the price of a barrel fell to $83.60.

On Wednesday evening, Brent lost nearly 1% of its value due to expectations of borrowing costs. Market talk focused on the possibility of Federal Reserve interest rates remaining high for an extended period of time. This outlook is detrimental to the outlook for demand for energy resources.

US government bond yields rose on Wednesday, dragging down the USD and putting significant pressure on the entire spectrum of commodity assets, including oil. This development raises concerns as commodities become less attractive to investors who pay in US dollars. Market participants speculated about the consequences if the Federal Reserve delays the start of its easing cycle or decides not to cut interest rates at all this year.

According to the API, fresh statistics showed that US crude oil inventories fell by 6.490 million barrels this week. Gasoline stocks fell by 0.452 million barrels, while distillate stocks rose by 2.045 million.

With June approaching, concerns are growing about the upcoming OPEC meeting on Sunday.

Brent Technical Analysis

On the H4 chart, Brent made its first upward push towards 84.66. Today, a corrective wave is developing towards 82.55, with the anticipated formation of a consolidation range above this level. An upward break from this range is expected to initiate a new uptrend towards 84.70. A break above this level could extend the trend to 86.50, representing a short-term target. From a technical point of view, this scenario is confirmed by the MACD indicator. The signal line is above zero and is directed strictly upwards.

On the H1 chart, Brent completed a bullish momentum structure at 84.66. It is currently correcting to 83.60. A consolidation interval was formed below this level. An upward break from this range will signal the start of a bullish wave towards 85.00, while a bearish break will open the potential for a correction to 82.55. After this correction, a new uptrend towards 85.00 could develop. From a technical point of view, this scenario is confirmed by the stochastic oscillator. The signal line is above the 20 mark. A new bullish structure is expected up to the 80 mark.

By the RoboForex analysis department

Disclaimer
Any forecast contained herein is based on the author’s own opinion. This analysis cannot be treated as trading advice. RoboForex assumes no responsibility for trading results based on trading recommendations and reviews contained herein.