Weak demand a headwind for Brent crude price
Brent crude price has been declining on continued excess of supply over global demand. Will the price continue falling?
The US Energy Information Agency reported on Wednesday the decline in US inventories was much less than expected. US crude inventories fell by 930 thousand barrels last week, the fourth consecutive decline, but at 527.8 million barrels they are still 3% higher from this time a year ago. At the same time gasoline stockpiles edged up by 200 thousand barrels, as gasoline demand continues to remain weak pointing to another inventories build. Weak US gasoline demand is bearish for oil prices with global market struggling to rebalance the supply glut.
On the daily chart the BRENT: D1 has been retracing higher last couple of weeks. The price has closed above the 50-day moving average MA(50).
- The Parabolic indicator gives a sell signal.
- The Donchian channel indicates a downtrend: it is tilted downward.
- The stochastic oscillator is falling but hasn’t reached the oversold zone yet.
- The MACD indicator is below the signal line and the gap is rising which is also a bearish signal.
- Position Sell
- Sell stop Below 50.04
- Stop loss Above 52.82