Brent sell

Oil prices continue to correct in a wide channel

04 July 2023 191
Oil prices continue to correct in a wide channel

Oil prices remain stable on Tuesday due to macroeconomic uncertainty. Factors supporting price stability include potential production cuts by OPEC+ leading exporters, Russia and Saudi Arabia, as well as weak demand data.

According to ING analysts, fundamentals do not affect oil price statistics as much as it was forecast. Instead, the market is more focused on the uncertain macroeconomic outlook, and in the short term there should not be any significant change in this trend. However, additional OPEC+ production cuts provide a more solid basis for the Brent price at $70 per barrel.

On Monday, Saudi Arabia announced it would extend its decision to reduce oil production by 1 million barrels per day for August. Russia is also planning cuts by 500,000 barrels per day. The decrease in production will amount to 1.5% of the global supply.

OPEC+ has been reducing production since last November in order to raise oil prices amid weakening demand in China and rising supply in the U.S.

OPEC+ members' production averaged 28.57 million barrels per day last month. It is 80,000 barrels per day more than in May.

On the other hand, the global GDP growth rate has declined over the past few weeks due to worsening data from China and Europe in the second quarter. As a result, demand for goods might be quite low in some countries, thereby putting pressure on distillate consumption levels.

Fundamentals are keeping oil prices in a corrective rectangle.

Brent prices are in the range of 71.50–78.50 on the H4 timeframe. There is downward resistance in this correction. A pullback from the trend resistance signals a sell-off in Brent.


The short-term outlook for Brent suggests selling.

The target is at the level of 71.90.

Part of the profit should be taken near 73.60.

The Stop-loss is set at 77.60.

Bearish trend has a short-term character, so the trade volume should not be more than 2% of your balance.

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

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