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Brent Crude Oil Prices are Falling

8/11/2022 2:25 PM

Brent Crude Oil is trading around 99.50 this morning after rising to 100.85 earlier in the week as market fears of disruptions in energy supplies eased somewhat.

The Russian pipeline company Transneft announced plans to resume the operation of the southern branch of the Druzhba oil pipeline, which will allow European consumers to receive oil in full again. These actions of the Russian side alleviate the energy crisis in Europe and lead to a reduction in market tension and falling prices.

On the other hand, US refineries and pipeline operators expect strong energy consumption in the second half of 2022, a survey of company earnings reports by economists showed. U.S. crude inventories rose by 5.458M barrels over the past week compared to preliminary estimates of 0.073M barrels, however, gasoline inventories fell by 4.978M barrels, well below the forecast of 0.633M barrels, which means that consumers have become more active buy gasoline and go on trips, and oil for industry accumulates in storage. US businesses expect energy consumption to rise from the fall, so more resources will be required to produce it.

Given the ongoing disruptions in the supply and shipment of oil to Europe, the United States may face an energy shortage, as a result of which Brent Crude Oil quotes are likely to show an upward trend in September-October this year. Thus, we can assume that until the beginning of the autumn period, the asset will continue to decline to the area of ​​96.00–91.00, and then the quotes will try to test 100.00–105.00.

The long-term trend is downwards. Last Friday, the trading instrument reached the support level of 96.25 and stopped, and now there is a correction in the asset with the target at 104.00, after which new short positions can be considered with the target around 96.25.

The medium-term trend changed to a downtrend last week, and the quotes broke through the target zone 102.04–101.19 and are now preparing to continue moving towards the 93.54–92.69 area. Now the price is trading in correction towards the area of ​​key resistance 105.05–104.20, from where we can consider new short positions with the target at the low of the current week 95.95.

Resistance levels: 104.00, 110.00. | Support levels: 96.25, 91.10.

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