Brent sell

Brent price decline may intensify as it breaks out of uptrend

03 May 2024 134
Brent price decline may intensify as it breaks out of uptrend

At the beginning of the trading session on Friday, Brent crude oil price rose slightly after a one-week low. This is due to the potential continuation of OPEC+ production cuts.


Earlier, the oil price hit the lowest level in the past week losing more than 6% because of stabilizing economic situation in the U.S. and reducing fuel supply disruptions in the Middle East. The U.S. central bank’s decision to keep interest rates at a higher level put significant pressure on the oil price.


The market is currently waiting for the OPEC+ meeting scheduled for June 1. Three reliable sources from the organization have already stated the possibility of further reduction of oil production by 2.2 million barrels per day at the next meeting. This scenario is likely if fuel demand fails to grow. As a result, oil prices will continue to rise, analysts forecast.


As Thursday's data showed, U.S. labor costs increased at the fastest pace in a year. This added pressure on the prices due to lower productivity. This indicates that the labor market is still quite tight. It may support the economy in the second quarter.


The U.S. Bureau of Statistics report on the number of nonfarm payrolls in the country is due today. These data will indicate future oil consumption.


At the technical level, Brent oil prices have broken out of the ascending trend on the D1 timeframe.


In terms of wave analysis, the price is forming the third descending wave on the H4 timeframe. Breaking through the top of the first wave at the level of 85.20 has already taken place. This indicates a potential strengthening of the downward momentum. The Bears Power indicator (standard values) is in the negative zone, confirming the sell-side movement.


Signal:

The short-term outlook for Brent oil suggests selling.

The target is near the level of 79.80.

Part of the profit should be taken at the level of 82.00.

A Stop-loss could be set at the level of 88.00.

 

The bearish 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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