On Friday, the Brent price moderately increased, remaining within the weekly trading range. Investors are weighing supply concerns in Libya and Iraq, supporting the prices amid concerns about slowing demand.
Libya's oil production fell by about 700,000 barrels per day (bpd) on Thursday. Libyan production losses could reach between 900,000 and 1 million bpd and last for several weeks, according to consulting firm, Rapidan Energy Group.
Meanwhile, Iraqi supplies are also expected to shrink. Previously the country's output surpassed its OPEC+ quota.
Against this background, it’s important to take into account the actions of OPEC+, aimed at stabilizing the global oil market. Visits of the OPEC+ Secretary General Haitham Al Ghais to Iraq and Kazakhstan, where the plans to compensate for surplus production of commodities were discussed, confirm the commitment of the key players to the implementation of agreements to regulate production.
Nevertheless, some factors put pressure on the oil price. In the middle of the week, it fell by 1% after the publication of data on U.S. crude oil reserves. According to the report, the reserves decreased less than expected. The decline amounted to 846 thousand barrels, so the inventories reached 425.2 million barrels.
From the technical point of view, the Brent price is forming a triangle uncertainty pattern. The Moving Average of Oscillator (with parameters 12, 26, 9) continues to grow in the positive zone. This indicates a potential price breakout from the triangle.
The short-term outlook for Brent is to buy with the target at 84.30. Part of the profit can be fixed near the level of 82.00. The Stop loss could be placed at 76.00.
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.
