There is room for oil prices to rise

26 June 2023 183
There is room for oil prices to rise

Oil is attempting to reverse again after attempting to decline on Friday. There are fundamental drivers for a rebound in the market. The only negative factor is the decrease in the S&P Global credit agency's forecast for Chinese economic growth by 0.3% for the current year. However, this news was expected, because a month ago many banks had already lowered their estimates of the country's GDP growth for this year. Oil prices have already fallen this year amid a slowdown in China. If it accelerates, it will be a negative.

 

Representatives of the oil and gas sector remain positive about the consumption in the second half of the year.

According to Saudi Aramco CEO Amin Nasser, the global oil market fundamentals will remain stable until the end of the year. This forecast is based on the high demand for raw materials in developing countries, especially China and India.

Despite the risks of recession in a number of OECD countries, economic development of Beijing and Delhi stimulates an increase in the need for crude. This year demand will be more than 2 million barrels per day.

 

At the same time, there is another risk of a decrease in demand for oil. The growth of renewable energy sources is not reasonable at the moment.

Last year, global energy demand grew by 1%. There was also a record 266 gigawatts increase in renewable energy capacity. However, fossil fuels remain dominant, and still represent more than 80% of supplies. This was stated in the latest Statistical Review of World Energy.

Energy Institute President Juliet Davenport highlighted the continued growth of greenhouse gas emissions despite the active development of wind and solar energy. 

 

According to the technical analysis, the oil price is attempting to reverse again. The reversal candlestick pattern hammer is observed on the daily timeframe for the second trading day in a row. It is possible to open long positions again.

The upper boundary of the downtrend, which corresponds to the price of $76.4, will be the upside target. Stop-loss will be set at the level of $73,3. At this point is the lower boundary of the rectangle, if the candles will be excluded on the daily timeframe, where it was a fall and buyback on the next day.

 

Growth of Brent crude oil:

Take profit – 76.4

Stop-loss – 73.3


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

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