Oil prices rose in early Asian trading on Friday, recording their first weekly rise in two months. The increase in oil prices was fuelled by the International Energy Agency's (IEA) favorable forecast on oil demand for next year.
At the moment, WTI and Brent are both trading slightly higher. The reason for their growth is also an announcement by the U.S. Federal Reserve (Fed) of the end of the monetary tightening cycle on Wednesday. Taking into account the published comments of politicians, the dollar exchange rate fell, while oil prices received additional support.
According to the IEA expectations, world oil consumption will rise by 1.1 million barrels per day in 2024. Such indicators are 130 thousand barrels per day higher than the previous forecasts of the agency.
Oil demand indicators from the Organization of the Petroleum Exporting Countries (OPEC) are two times higher than the energy agency's estimates. OPEC members now forecast demand for oil to grow by 2.25 million barrels per day next year.
Meanwhile, Barron's analysts point to the presence of contango in the oil market. This means that prices for contracts with delivery in a few months are higher than oil prices with delivery in the near future. This may indicate low demand and investors' desire to store oil for later sale. According to Roth MKM analyst Leo Mariani, this shift to contango is due to changes in trading and speculator activity, which may lead to higher prices if speculators get back in the market.
Brent quotes, after the price went beyond the downtrend on the H4 timeframe, tried to form an upward correction. However, the broken trend resistance became a support for the downtrend. Divergence of Relative Strength Index (RSI) indicator (standard values) foreshadows a change in the direction of oil rate movement towards growth.
Signal:
The short-term outlook for Brent is to buy.
The target is at the level of 84.55.
Part of the profit should be fixed near the level of 79.50.
A Stop-loss should be placed at the level of 70.80.
The 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.
