Oil continued its uptrend yesterday. The U.S. inflation data for December showed a slightly better than expected slowdown to November levels. Now, it can be said that U.S. inflation has changed to deflation, largely due to the correction in energy commodities.
As it was predicted earlier in our forecasts, positive inflation data supported the entire line of commodities.
The news on oil futures are mixed.
The U.S. Energy Information Administration (EIA) has changed its forecast for the average spot price of Brent. According to the new forecast, in 2023 the price of this oil grade will be lower by 10% than the previous forecast. This data was released in the latest Short-Term Energy Outlook (STEO). A number of assumptions were made in the EIA's forecast for January. According to this forecast, in 2023 the average price of Brent will be $83 per barrel. This is 18% lower than in 2022.
At the same time, some analysts predict a further rise in oil.
Currently, there is short-term potential growth in oil prices by $5-10 per barrel, and even more growth is expected in the second half of the year.
That is the view of Standard Chartered analysts, according to a new report sent to Rigzone, adding that the speculative positioning of investors is too bearish at the moment.
Our position on oil prices at the moment confirms that oil prices will remain or rise this year. However, the volatility did not go anywhere. Therefore, after the positive data speculators may fix long positions, which may cause a short-term correction in oil prices.
On the hourly chart, oil made an attempt to break up the uptrend on the back of weak inflation. However, this growth was quickly eliminated and the quotes are now trading within the trend again. This is a good signal for a possible continuation of the decrease. Allowing the exit to the lower trend line to remove overbought. The target for the move is $81.0 per barrel. Stop-loss is set just above yesterday's highs of $85.0.
Decline of Brent crude oil:
Take profit – $81.0
Stop-loss – $85.0
This content is for informational purposes only and is not intended to be investing advice.
