Brent Storms To $120; The Rally Could Fizzle Out Soon

www.investing.com/analysis/brent-storms-to-120-the-rally-could-fizzle-out-soon-200625095

By FxPro Financial Services Ltd (Alexander Kuptsikevich) | May 31, 2022 05:54AM ET

This article has already been saved in your Saved Items

Brent spot prices were approaching $120 earlier today on news that the EU managed to agree on an immediate embargo on 2/3 of oil imports from Russia. We saw oil trading above current levels for just a couple of days in March.

Brent crude oil daily chart.

Over the last four days, as discussions on the ban on oil imports have continued, its price has risen by more than 7%, and much of the news may already have been priced in.

Current levels are at a considerable distance from the highs of 2008 at $146 and below the peaks of 2011 and 2012 when they briefly went above $126. However, from a historical perspective, prices are close to unsustainably high levels.

Already, high energy costs are causing a decline in retail consumption in Europe and the US, the world’s wealthiest regions. No doubt developing countries are experiencing an even more significant slowdown in their economies because of prevailing high fuel prices.

Brent crude monthly price chart.

Oil is susceptible to fluctuations in supply and demand. Hence, a shift in the balance of supply and demand by a couple of percent sometimes triggers movements of tens of percent, as happened more than once in the past decade.

The high cost of fuel is already causing a reduction in consumption, which, combined with higher quotas in OPEC+, will shift the balance towards the buyers in the coming months.

From current levels, we would venture to guess that oil has minimal short-term upside potential to bounce back from the news emotionally. A prolonged lull could follow, with movement in the $100-120/bbl range until the end of the year, during which time demand and supply will adjust to the new reality.

The longer-term prospects remain an open question. The chances are now roughly equal that the oil market at levels near $120 remains at the foot of an extended multi-year rally or is ready to repeat the collapse of 2014 or 2008.

Can Crude Oil Prices Hold Above This Key Support Level? By Chris Vermeulen - Aug 18, 2022 1

Talk of a global recession may prompt a broad decline in Crude oil prices as the excesses of the past 10+ years unwind. This unwinding process pushed to the forefront for traders...

European Energy Market Remains Center Stage By Ellen R. Wald, Ph.D. - Aug 18, 2022 7

As the summer comes to a close, oil traders should start paying close attention to the European energy situation. Even though most of the concern is with natural gas availability...

Natural Gas Bulls In Final Sprint For $10 In Heavily Overbought Market By Barani Krishnan/Investing.com - Aug 18, 2022 22

Cash gas prices already above $10; futures could follow but overbought Henry Hub’s front-month up almost 140% over past 6 months Rally in gas futures defy fundamentals of rising...

Add a Comment

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:

Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

I have read Investing.com's comments guidelines and agree to the terms described.

I Agree

Write your thoughts here

Are you sure you want to delete this chart?

Delete Cancel

Post

Post also to:

Replace the attached chart with a new chart ?

Replace Cancel

1000

Comment Guidelines

Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.

Please wait a minute before you try to comment again.

Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.

<div id="comment">
				<div class="comment js-comment" data-comment-id="{commentID}" id="comment-{commentID}" data-user-id="">
    <div class="mainComment js-content">
       <div class="commentInnerWrapper">
        <a href="{userLink}" class="js-user-link"><img src="{userImage}" width="33" height="33" alt="{usernameAlt}" class="img" onerror="this.src='https://i-invdn-com.investing.com/defaultUserMaleTmp.png';"></a><div class="commentBody">
                					<span class="commentUsername">
                    	<a href="{userLink}" class="js-user-link js-user-name">{username}</a>
					</span>
                                <span class="js-date" comment-date="{dateFormat}" comment-date-formatted="{dateFormatted}" title="{dateTitle}">Just Now</span>
                <div class="commentDropDown js-commentDropDownWrapper " data-user-id="" data-cid="{commentID}">
	<a href="javascript:void(0);" class="threeDotsIconSmall js-thinDropdownArrow"></a>
	<div class="tooltipPopup commentActionsPop noHeader js-commentDropDownOptions displayNone">
		<div class="addRow js-option share">
			<a href="javascript:void(0);" class="js-commentSharePopup" data-cid="{commentID}" data-curl="{commentLink}"><span class="smallShareIcon middle"></span>Share</a>
		</div>

<div class="js-option addRow follow">
            <div class="js-follow-post-button">
                <span class="alertfollowIcon middle"></span>Follow this post            </div>
            <div class="js-unfollow-post-button displayNoneImp">
                <span class="alertUnfollowIcon middle"></span>Unfollow this post            </div>
        </div>

<div class="addRow js-option save">
		<a href="javascript:void(0);" class="js-save-item-btn" data-item-type="comments" data-item-id="{commentID}">
			<i class="saveItemBigIcon middle"></i>
			Save		</a>
	</div>
	<div class="addRow saveItemsConfirmation noHover displayNone js-saveItemResult">
		
<div class="content js-saveItemSuccess displayNone">
	<span class="mediumGreenSuccessIcon"></span><span>Saved. See <a href="/members-admin/saved-items" target="_blank">Saved Items</a>.</span>
	<a href="javascript:void(0);" class="bugCloseIcon js-close"></a>
</div>
<div class="content js-saveItemAlreadySaved saveItemAlreadySaved displayNoneImp">
	<span>This comment has already been saved in your <a href="/members-admin/saved-items" target="_blank">Saved Items</a></span>
	<a href="javascript:void(0);" class="bugCloseIcon js-close"></a>
</div>
	</div>

<div class="addRow shareButtons js-sharePopup displayNone">
			<div class="js-shareComment"><span class="js-shareCommentSpan"></span></div>
		</div>
	</div>
</div>
                 <div class="commentAuthor js-comment-by-author"><span class="commentAuthorIcon"></span>Author's response</div>             </div>
		<div id="commentText-{commentID}" class="js-text-wrapper commentText withImage">
							<div id="commentBigChart{commentID}" class="commentBigChart js-comment-chart" onclick="openViewChartPopup('{commentID}')">
					<img src="https://d1-invdn-com.investing.com/comments_images/{commentImage}" alt="{commentAlt}">
					<i class="newMagnifyChartIcon"></i>
				</div>
						<span class="js-text">{commentContent}</span>
			<div class="clear"></div>
							<div class="commentButtons js-not-master-user">
					<a href="javascript:void(0)" class="reply js-reply-btn" data-real-parent-id="{commentID}" data-to-user-name="{username}" data-to-user-id="">Reply</a>
					<div class="inlineblock likeDislikeBox js-like-dislike-box" data-item-id="{commentID}">
	<input class="js-like-checkbox" type="checkbox" name="option" value="Yes" id="like_{commentID}">
	<label for="like_{commentID}" class="like" title="I agree"></label>
	<span class="numOfLikes js-like-count lighterGrayFont">0</span>
	<input class="js-dislike-checkbox" type="checkbox" name="option" value="No" id="dislike_{commentID}">
	<label for="dislike_{commentID}" class="dislike" title="I disagree"></label>
	<span class="numOfDislikes js-dislike-count lighterGrayFont">0</span>
</div>

<div class="reportComment js-flag float_lang_base_2">
                            <a href="javascript:void(0);" id="commentFlag_{commentID}">
                                <span class="reportCommentIcon middle"></span><span class="inlineblock middle">Report</span>
                            </a>
                        </div>
                    				</div>
					</div>
	   </div>
	</div>
	</div>			</div>
			<div id="reply">
				
    <div class="commentReply js-comment js-comment-reply" data-comment-id="{commentID}" id="comment-{commentID}" data-user-id="">
		<div class="commentInnerWrapper"><a href="{userLink}" class="js-user-link"><img src="{userImage}" width="33" height="33" alt="{usernameAlt}" class="img" onerror="this.src='https://i-invdn-com.investing.com/defaultUserMaleTmp.png';"></a><div class="commentBody js-content">
            				<span class="commentUsername">
					<a href="{userLink}" class="commentUsername js-user-link js-user-name" onMouseOver="">{username}</a>
				</span>
                        <span class="js-date" comment-date="{dateFormat}" comment-date-formatted="{dateFormatted}" title="{dateTitle}">Just Now</span>
			 <div class="commentAuthor js-comment-by-author"><span class="commentAuthorIcon"></span>Author's response</div> 			<div class="commentDropDown js-commentDropDownWrapper " data-user-id="" data-cid="{commentID}">
	<a href="javascript:void(0);" class="threeDotsIconSmall js-thinDropdownArrow"></a>
	<div class="tooltipPopup commentActionsPop noHeader js-commentDropDownOptions displayNone">
		<div class="addRow js-option share">
			<a href="javascript:void(0);" class="js-commentSharePopup" data-cid="{commentID}" data-curl="{commentLink}"><span class="smallShareIcon middle"></span>Share</a>
		</div>

</div>
		<div id="commentText-{commentID}" class="js-text-wrapper commentText withImage">
							<div id="commentBigChart{commentID}" class="replyBigChart displayNone js-comment-chart">
					<img src="https://d1-invdn-com.investing.com/comments_images/{commentImage}" alt="{commentAlt}">
					<i class="newMagnifyChartIcon"></i>
				</div>
				<span id="commentSmallChart{commentID}" class="commentSmallChart pointer js-comment-chart" onclick="openViewChartPopup('{commentID}')">
                    <img src="https://d1-invdn-com.investing.com/comments_images/{commentImageSmall}" width="116" height="52" alt="{commentAlt}">
                    <span class="chartMagnifyOverlay displayNone"></span>
                    <span class="searchGlassIcon chartMagnify displayNone"></span>
                </span>
						<span class="js-text">{commentContent}</span>
			<div class="clear"></div>
							<div class="commentButtons js-not-master-user">
					<a href="javascript:void(0)" class="reply js-reply-btn" data-real-parent-id="{commentID}" data-to-user-name="{username}" data-to-user-id="">Reply</a>
					<div class="inlineblock likeDislikeBox js-like-dislike-box" data-item-id="{commentID}">
	<input class="js-like-checkbox" type="checkbox" name="option" value="Yes" id="like_{commentID}">
	<label for="like_{commentID}" class="like" title="I agree"></label>
	<span class="numOfLikes js-like-count lighterGrayFont">0</span>
	<input class="js-dislike-checkbox" type="checkbox" name="option" value="No" id="dislike_{commentID}">
	<label for="dislike_{commentID}" class="dislike" title="I disagree"></label>
	<span class="numOfDislikes js-dislike-count lighterGrayFont">0</span>
</div>

Are you sure you want to delete this chart?

Delete Cancel

Post

Replace the attached chart with a new chart ?

Replace Cancel

1000

Comment Guidelines

Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.

Please wait a minute before you try to comment again.

I feel that this comment is:

Spam

Offensive

Thank You!

Your report has been sent to our moderators for review

Central Banks

Interest Rates

Next Meeting

FED

2.50%

Sep 21, 2022

ECB

0.50%

Sep 08, 2022

BOE

1.75%

Sep 15, 2022

SNB

-0.25%

Sep 22, 2022

RBA

1.85%

Sep 06, 2022

BOC

2.50%

Sep 07, 2022

RBNZ

3.00%

Oct 05, 2022

BOJ

-0.10%

Sep 22, 2022

CBR

8.00%

Sep 16, 2022

RBI

5.40%

Sep 30, 2022

PBOC

2.75%

BCB

13.75%

Sep 21, 2022

US 30	33,997.4	+17.1	+0.05%
US 500	4,284.0	+10.0	+0.23%
Dow Jones	33,999.04	+18.72	+0.06%
S&P 500	4,284.15	+10.11	+0.24%
Nasdaq	12,965.34	+27.22	+0.21%
S&P 500 VIX	19.56	-0.34	-1.71%
Dollar Index	107.403	+0.917	+0.86%

Crude Oil WTI	90.50	+2.39	+2.71%
Brent Oil	96.53	+2.88	+3.08%
Natural Gas	9.189	-0.055	-0.59%
Gold	1,773.15	-3.55	-0.20%
Silver	19.483	-0.248	-1.26%
Copper	3.6463	+0.0628	+1.75%
US Soybeans	1,405.25	+15.25	+1.10%

SPDR S&P 500	427.88	+1.23	+0.29%
iShares Russell 2000	198.97	+1.36	+0.69%
Invesco QQQ Trust	329.28	+0.79	+0.24%
Direxion Daily Junior Gold Miners Bull 2X Shares	33.14	+0.41	+1.25%
iShares Silver	18.04	-0.21	-1.18%
ProShares Ultra VIX Short-Term Futures	8.75	-0.19	-2.13%
ProShares UltraPro QQQ	37.55	+0.25	+0.67%

Apple	174.15	-0.40	-0.23%
Alphabet A	120.17	+0.62	+0.52%
Tesla	908.61	-3.38	-0.37%
Amazon.com	142.30	+0.20	+0.14%
Netflix	245.17	+4.02	+1.67%
Meta Platforms	174.66	-0.19	-0.11%
Bank of America	36.30	-0.11	-0.30%

Brent Storms To $120; The Rally Could Fizzle Out Soon

Related Articles