Buying Brent up to 79.0

08 August 2024 158
Buying Brent up to 79.0

According to the Energy Information Administration (EIA), US crude oil inventories dropped again this week. The stocks fell by 3.463 million barrels last week, while the forecast before yesterday's release suggested a decline of only 1.600 million barrels. In fact, the inventories dropped below last week's level, down to -3.728 million barrels. This is the seventh consecutive week of significant declines in oil stocks. In addition to the agency's data, this trend is also confirmed by the American Petroleum Institute's (API) estimate: crude oil inventories were forecast to rise by 0.850 million barrels, while the actual figure was only 0.180 million barrels.


Low US oil inventories are likely to support global prices.


From a technical point of view, Brent prices are forming a new short-term range with a lower limit at $77.5 per barrel and an upper limit at $79.5. The level of 79.5 for Brent oil is quite interesting because the local low of August 2 was recorded there and was not retested. Therefore, it is quite likely that the price will try to break it from the bottom upwards, and there will be several such attempts, as it usually happens. Support at 77.5, in turn, contains the local high of August 6, when reached, the price is likely to rebound sharply.


From a geopolitical perspective, upward momentum may be reinforced by a sudden escalation of the Middle East’s situation.


The overall recommendation is to buy Brent oil in the short term with a pending order from the level of 77.5.

Profits should be taken at the level of 79.0. A Stop loss could be set at the level of 76.0.

The possible loss should not exceed 2% of your deposit funds.

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

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