The oil price has risen for the second week in a row. Steady demand for oil led to a stronger-than-expected decline in US inventories. That outweighed market participants' fears of an interest rate hike by the Federal Reserve in July.
According to OANDA analyst Edward Moya, the outlook for oil demand improved because of the summer peak consumption season and higher prices for Saudi oil. This triggered a sharp decline in US inventories, as indicated by data from the Energy Information Administration.
The world's leading oil exporters, Russia and Saudi Arabia, announced new production cuts in August. The total cuts now stand at around five million barrels per day, equating to 5% of global oil output.
However, oil price gains are capped by strengthening expectations that the US Federal Reserve is likely to raise interest rates at its July meeting. After the release of the US jobless claims data on Thursday, the likelihood of a monetary policy tightening by the US regulator has increased.
OPEC's long-term forecasts on oil demand in 2024 remain optimistic. The Producers Alliance will release its forecast later this month.
The growth in demand for oil is expected to reach 2.35 million barrels per day, or 2.4% this year. According to experts, this figure can be considered abnormally high. In all likelihood, the OPEC forecast for 2024 will be lower than this value.
But even with this condition, the oil consumption next year will be much higher than the annual average for the last ten years (not counting the pandemic period).
The Brent crude oil chart shows a wide correction on the H4 timeframe. The price has moved beyond the downward resistance that has been in place for two months. A breakout of this slope may strengthen the upward movement.
The short-term outlook for Brent crude oil is to buy.
The target is at the level of 79.55.
Part of the profit should be fixed near the level of 78.15.
A Stop-loss should be placed near the level of 74.00.
The bullish trend is of a short-term nature, so it is suggested to limit the trading volume to no more than 2% of your capital.