Brent is forming a new uptrend

20 October 2023 197
Brent is forming a new uptrend

Oil price continues to grow amid the events in the Middle East. The risk of the escalation of the conflict could disrupt global oil supplies, which is causing concern in the markets.

 

According to Vandana Hari, founder of Vanda Insights, commodity prices will remain volatile as long as tensions continue in the region.

 

U.S. President Joe Biden made a brief visit to Israel this week to organize negotiations in an attempt to contain the growing conflict in the Middle East. However, the planned meeting with Arab leaders was canceled.

 

Additional support for crude oil prices this week came from U.S. inventory data. Stockpiles at Cushing fell to their lowest levels in 9 years. According to the Energy Department, it’s planned to replenish the Strategic Petroleum Reserve by about 6 million barrels.

 

Meanwhile, the administration of U.S. President Joe Biden lifted restrictions imposed on Venezuela's oil sector. A new general license issued by the U.S. Treasury Department authorized Caracas to freely produce and export crude to foreign markets for the next six months.

 

In addition, the U.S. Treasury removed the secondary trading ban on certain Venezuelan sovereign bonds and state-run oil company PDVSA debt and equity. However, a ban on trading in the primary Venezuelan bond market remains in place.

 

The U.S. has been seeking ways to boost global flows of oil to alleviate high prices caused by OPEC+ decisions to reduce output. According to experts, if the Venezuelan government doesn’t increase investment in the country's oil sector, the reduction in the supply of oil won’t be compensated.

 

Brent crude oil price is forming a new uptrend on the H4 timeframe.

 

Bulls Power indicator (standard values) is in the positive zone, which signals the strengthening of the upward channel. Solid fundamentals support the strength of the bulls.

 

Signal:

The short-term outlook for Brent is to buy.

The target is near the level of 96.00.

Part of the profit should be fixed near the level of 94.50.

A stop-loss should be placed near the level of 90.40.

 

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.

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

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