Growing demand and weak prospects for oil production hint at the further rise of prices

12 April 2023 265
Growing demand and weak prospects for oil production hint at the further rise of prices

Oil prices demonstrated weak growth ahead of the release of U.S. inflation data. Yesterday's lower inflation figures in China cheered up the market. Consumer inflation in China hit an 18-month low and the selling prices reduction accelerated in March. Since the country is one of the leading economies in the world, it might pass on its low inflation to the rest of the world. Thus, global inflation could continue to decline, and global central banks will seek to promote sustainable economic development.


Analysts forecast a slowdown in oil production growth.

Shale production has reached its peak. The oil market is going through a period of unpredictability, analysts say. Shale production has faced several problems, including inflated prices, labor shortages, and lack of investment. At the time of active development of deposits in the U.S., oil production increased by about 15% annually. Over the past decade, extraction has doubled to 13 million barrels per day. In the next 12 months, production is going to increase by 250,000 barrels only.

Demand for petroleum products in India is meeting expectations!

The data published on Monday showed an increase in fuel consumption in India to record levels. The figure rose by 5% year-on-year to 4.83 million barrels per day (20.5 million tons). This has become a record high level of fuel consumption since 1998, as stated by the Ministry of Petroleum and Natural Gas, Government of India


According to the technical analysis, oil is trying to break out from the rectangle, mentioned in the previous forecasts. Thus, there is going to be a new growth momentum over the size of the figure. These growth targets coincide with the highs of February and March of this year.

As a result, the growth target is the level of $86.9. A Stop-loss is placed at the rebound and fixed within the rectangle at the level of $85.0.


Growth of the Brent oil:

Take profit — 86.9

Stop-loss — 85.0

This content is for informational purposes only and is not intended to be investing advice.

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