As a result of the rapid decline in prices last week amid investors' fears of an impending recession, Brent Crude Oil reached 77.00, which acted as support.
Quotes are now recovering after the strongest weekly fall in recent months amid Russian President Vladimir Putin's statement that the world's largest energy exporter may reduce oil production in response to the imposition of a price ceiling of 60.0 dollars per barrel in the European Union, Australia, and the G7 countries. The reduction in supply on the market may lead to an increase in oil prices up to 83.50.
A negative factor for the trading instrument is the risk of a recession in the global economy next year. Today at 15:30 (GMT+2), statistics on US inflation will be released, which will affect tomorrow's decision on the interest rate of the US Federal Reserve: analysts expect the core consumer price index to decline from 6.3% to 6.1% YoY, and standard – from 7.7% to 7.3%. If the actual figures justify the forecast, then oil quotes may rise against the backdrop of easing the hawkish rhetoric of the regulator, but if inflation exceeds expectations, the US dollar may strengthen, and energy prices will probably continue to decline with the target around 69.70.
The long-term trend is downwards. Last week, the quotes reached a strong support level of 77.00, from where one can observe a corrective growth to 83.50. If it is held, the decline will continue to update last week's low and continue downward to 69.70.
The medium-term trend is downwards. Last week the price consolidated below the target zone 3 (78.20–77.45), and the next sell target is zone 4 (70.70–69.95). Now the asset is being corrected with a likely target at the key range resistance level around 82.57–81.90, after reaching which one can open short positions with the first target at the low of last week.
Resistance levels: 83.50, 90.50. | Support levels: 77.00, 69.70.