The oil price has been rising for the third week in a row. This is due to production cuts by the leading OPEC+ countries, as well as supply disruptions in Africa.
Work at the second largest oil field in Libya has been halted amid protests. Production in Nigeria has also been suspended. Meanwhile, Russia is starting to cut supplies, while Saudi Arabia has extended its oil production curbs for August.
Oil prices will keep rising also due to the fact that Russian oil exports could be significantly reduced, said Edward Moya, an analyst at OANDA.
In early July, Saudi Arabia announced an extension of its 1 million bpd oil production cut for August. Russia plans to cut production by 500,000 bpd next month.
If the actions of the leading OPEC+ countries are fully realized, global oil production will be reduced by about 45 million barrels by the end of August. This figure does not take into account Saudi Arabia's production cut of 30 million barrels in July.
On Thursday, OPEC raised its oil demand forecast for 2023. The organization's representatives added that consumption is expected to grow by 2.2% next year.
National Australia Bank said in a research note on Friday that it expected the OPEC forecast, if realized, to deliver oil prices well above $100 a barrel, adding that the softening value of the U.S. dollar continued to boost commodity prices.
The H4 timeframe of the Brent oil chart demonstrates the formation of an uptrend.
In terms of wave analysis, the price is forming the third ascending wave. The first wave top at 77.25 has already been broken through. However, the target of the current wave has not been reached yet.
The Relative Strength Index (standard values) confirms the current short-term upward direction of the price in convergence. However, the curve of the indicator has entered the overbought zone, which indicates the possibility of a decline in price to the trend support.
Signal:
Short-term prospects for Brent oil suggest buying around the 79.75 level.
The target is at the level of 85,10.
Part of the profit should be taken near the level of 82,70.
A stop-loss could be placed at the level of 76,80.
The bullish trend is short-term, so trade volume should not exceed 2% of your balance.
This content is for informational purposes only and is not intended to be investing advice.
