Oil prices will manage to continue rising

16 June 2023 242
Oil prices will manage to continue rising

Brent oil quotations promptly closed the gap of the early week, as was stated in the previous forecast. Many market participants strive to fix profits, but so far, it doesn’t hinder the recovery growth in prices. Next week the black gold price might test the local highs just above 78, but first, it will have to reach 76.7

The weaker dollar and the beginning of active stimulation of the Chinese economy outweighed the fears of oil market traders about rising interest rates in the U.S. and Europe. The People's Bank of China eased monetary policy due to the slow recovery of the national economy after the removal of anti-COVID restrictions. Investors expect further stimulus from the Chinese government.

While statistics on industrial production and retail sales in China for May turned out to be worse than forecasted, oil demand holds up at a high level. On Thursday, the data showed that the output of Celestial Empire’s refineries rose by 15.4% compared to last year's level.

Kuwait Petroleum Corporation expects China to continue increasing its oil consumption in the second half of the year. According to Sheikh Nawaf Saud Al Sabah, Chinese companies continue to buy the same or higher volumes of crude oil. It signals that demand remains high.

The increase in purchases of oil by Asian countries is confirmed by data concerning the cost of tanker freight. Oil freight prices have reached highs since April in anticipation of repair works at many refineries. 156 tankers were chartered for June to transport crude from the Middle East to East Asia, compared to 137 in May.

Currently, oil strives to consolidate within the 75-76 range, and its chart looks better after closing the gap on Monday. The Stochastic indicator confirms a signal for purchase, increasing the likelihood of continued growth. The nearest target for Brent buyers will be 76.7.

We may offer you the following option of trading strategy: 

Buy Brent oil in the range of 75 – 75.5. Take profit — 76.7. Stop-loss — 74.5.

Also, traders can use Trailing stop instead of fixed Stop-loss at their disposal. 

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

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