The price of Brent crude oil surged by 2% on Monday, leading to a moderate adjustment in the commodity market on Tuesday morning. Currently, a barrel of the North Sea variety is trading at around 84 USD. This increase in price is primarily driven by improving prospects for global demand and expectations of supply constraints by global oil producers.
Reports from OPEC+, the International Energy Agency, and the US Department of Energy indicate a steady rise in energy demand expected in the second half of 2024. Moreover, the surge in Brent’s price was supported by the overall increase in the value of risky assets, attributed to reduced inflationary pressures in major economies. This development is signaling a potential decrease in lending costs in the coming months.
Key OPEC+ members like Russia and Iraq have affirmed their commitment to adhering to agreed production quotas, further boosting market sentiment. Saudi Arabia has also expressed its willingness to adjust production levels in response to market conditions.
In terms of technical analysis, the H4 Brent chart shows a consolidation range above the 81.60 level, with a projected growth wave towards the level of 86.40. Following this, a correction to 81.60 is expected before the upward trend continues towards 89.00. The MACD indicator supports this scenario, with its signal line above the zero mark and trending upwards.
Looking at the H1 Brent chart, the market found support at 81.56 and is progressing with the second half of the growth wave. The local target at 83.98 has been met, with a potential rise to 84.00 in the near term. A correction to 82.76 is anticipated before a push towards 86.40. The Stochastic oscillator corroborates this outlook, with its signal line below the 20 level, signaling a potential uptrend.
In conclusion, the recent surge in Brent oil prices is underpinned by a combination of factors including global demand outlook, supply constraints, and overall market sentiment towards risky assets. Investors are closely monitoring developments in the commodity market and key geopolitical events that may impact oil prices in the near future.