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Brent Crude Oil Correction After Renewing the August Highs

11/8/2022 11:48 AM

During the Asian session, Brent Crude Oil prices slightly corrected after a two-day increase, which led to the renewal of local highs from August 30, and are trying to consolidate below 96.80.

Market activity remains subdued, and investors are focused on the US mid-term elections, the results of which will be announced tomorrow. On Thursday, the October statistics on consumer inflation will be released, which may affect the December decision of the US Federal Reserve on monetary policy: now more than half of analysts expect an increase in interest rates by only 50.0 basis points, but if inflation does not decrease, or the pace of its decline is insufficient, the "hawkish" rhetoric of the regulator may intensify. Current forecasts suggest a slowdown in the US consumer price index in October from 8.2% to 8.0%.

Additional pressure on the quotes of "black gold" is exerted by growing fears about a global recession in the world economy. Experts drew attention to the decline in the dynamics of imports and exports in China, as well as denials of reports that official Beijing is preparing to move away from the "zero tolerance" policy for COVID-19. On the other hand, expectations of a lack of energy supply in the market due to an embargo on Russian supplies to the EU and a reduction in production by OPEC+ countries in November by 2.0M barrels per day do not allow quotes to reverse turn to negative dynamics.

On the daily chart, Bollinger bands are growing moderately: the price range is expanding, but it is not keeping with the burst of the "bullish" activity. The MACD indicator is growing, keeping a strong buy signal (the histogram is above the signal line). Stochastic, having reached "80", reversed into a horizontal plane, indicating that the instrument may become overbought in the ultra-short term.

Resistance levels: 97.80, 98.90, 100.00, 101.00. | Support levels: 96.54, 94.50, 92.47, 91.00.

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