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Brent Crude Oil Long-Term Trend Remains Downwards

9/6/2022 2:56 PM

The "bears" failed to break through the support level of 93.50, which led to an upward correction in the asset, which is supported by reports of the introduction of a maximum level of oil and gas prices from the Russian Federation.

Also, the decision of the G7 finance ministers suggests a ban on the insurance of ships that carry energy at a higher cost, which will help stabilize the market and reduce inflation. In response, the Russian government's Deputy Prime Minister Alexander Novak said that the country would not supply oil to states that use non-market pricing schemes. Bills on introducing a price ceiling are still being discussed, but they are likely to be adopted anyway, and market participants are already pricing in a possible shortage of energy resources. Against this background, the trading instrument may rise to 102.00 and above in the medium term.

The second factor supporting oil prices is the proposal of the OPEC+ Monitoring Committee to reduce hydrocarbon production in October by 100.0K barrels per day. The delegation members agreed with this decision but made a reservation: if necessary, representatives of the organization could meet at any time to correct it.

Thus, in the medium term, Brent Crude Oil quotes may rise to 102.00, after the breakdown of which the trend direction will be more clearly defined.

The long-term trend remains downwards. This week, an upward correction is developing to 102.00, and if it holds, the negative dynamics will continue with the renewal of the September low, and if it breaks up, the target for purchases will be 110.00.

Last week, market participants unsuccessfully tried to overcome target zone 2 (93.54–92.69), as a result of which a correction to the medium-term downtrend is developing with a possible target in the 102.03–101.18 zone, after the test of which it will be possible to consider new sales with the target at 92.70.

Resistance levels: 102.00, 110.00. | Support levels: 93.55, 86.50.

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