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Oil Prices Plummet: What's Next?

Published 02/26/2024, 08:43 AM
Updated 02/15/2024, 03:13 AM

The price of a Brent barrel is sharply declining on Monday and has already reached 81.20 USD.

The primary reason for this is concerns about demand outweighing fears about global commodity supply. It's pretty straightforward: high US inflation, increasingly confirmed, may delay interest rate cuts by the Federal Reserve, indirectly stimulating oil demand. Hence, the delay in the monetary easing cycle is unsettling the oil sector.

The US dollar position remains weak, generally benefitting commodity buyers.
Once market concerns fade away, prices are highly likely to resume their upward trajectory.

Brent technical analysis

Brent price analysis

On the H4 Brent chart, a consolidation range has formed around 81.60. Currently, the market has extended it up to 82.82. Today, the range is expanding down to 80.20 with a corrective wave practically forming. Once this is over, the price might rise to 81.60 (testing from below). Subsequently, another corrective link to 79.80 could follow. After its completion, another upward wave could start, targeting 83.30, from where the trend might proceed towards the first target of 86.60. Technically, this scenario is confirmed by the MACD, with its signal line below the zero level, poised to reach new lows.

Brent price analysis

On the H1 Brent chart, a declining wave is forming, aiming for 80.20 as a local target. After reaching this level, the price could rise to 81.60, with the subsequent correction expected to continue to 79.80. Technically, this scenario is confirmed by the Stochastic oscillator, with its signal line below 20 and anticipated to rise to 50, potentially maintaining its upward momentum towards 80.

By RoboForex Analytical Department

Disclaimer: Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

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