Competing factors increase the probability of Brent oil growth

03 November 2023 242
Competing factors increase the probability of Brent oil growth

On Friday, oil prices continue to remain stable under the influence of competing factors. The cost of Brent crude oil is holding near the level of $87 per barrel after rising by 2.6% on Thursday. The increase was due to the weakening dollar and signs of an end to the Federal Reserve's (Fed) monetary policy tightening.

 

Palestinian-Israeli relations remain the main focus of investors' attention. In the medium term, the growing tension in the Middle East may contribute to the reduction of supply in the oil market. However, the risk of disruptions in supplies of oil is currently low. 

 

Any direct involvement of third parties in the conflict may lead to the growth of Brent oil to the mark of $100 and above.

 

The demand problem, which is holding back the cost of oil, is of great importance. According to data released in this week's reports, China's manufacturing slowdown resumed last month. Fuel demand in the U.S. remains low and oil reserve levels are rising.

 

Some European countries are also showing signs of declining diesel demand. Sales have fallen in the UK, Spain and France.

 

According to analysts' forecasts, the leading oil exporter, Saudi Arabia, plans to extend its voluntary production cut by 1 million bpd in December, which will also have a negative impact on global fuel supply.

 

In addition, data on the total number of drilling rigs in the United States will be released during the day. The indicator will serve as a benchmark for determining future fuel production.

 

Brent crude oil prices are forming a corrective channel on the D1 timeframe. The price pullback from the support indicates the growing interest in buying.  

 

The price has broken out of the downtrend on the H4 timeframe. Bulls Power indicator volumes (standard values) are increasing in the positive zone, which indicates the growth of bullish positions.

 

Signal:

 

Short-term prospects for Brent oil suggest buying

The target is at the level of 93.70.

Part of the profit should be taken near the level of 89.50.

A stop-loss could be placed at the level of 82.65.

 

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.

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