Brent Crude Oil Price Update – Underpinned by Friendly API Report; Next On-tap EIA Data

Based on the early price action, the direction of the August Brent crude oil market the rest of the session is likely to be determined by trader reaction to the 50% level at $65.04.
James Hyerczyk
Brent Crude Oil

International-benchmark Brent crude oil futures are following U.S. futures higher on Wednesday after a private industry report released late yesterday showed a decline in U.S. crude inventories.

Additionally, the conflict between the United States and Iran continued to underpin prices while stoking fears of a potential supply disruption. Demand concerns were also somewhat dampened on Tuesday when Fed Chair Powell failed to acknowledge the need for an interest rate cut due to a weakening economy.

At 07:09 GMT, September Brent crude oil futures are trading $59.06, up $1.23 or +2.14%.

The American Petroleum Institute (API) reported stockpiles fell by 7.5 million barrels in the week-ended June 21. Traders were looking for a 2.5 million barrel decline.

Daily September Brent Crude Oil

Daily Technical Analysis

The main trend is up according to the daily swing chart. The uptrend resumed earlier today when buyers took out three days of highs. The market has room to run to get to the next main top at $71.61, however, it’s going to have to get through a series of retracement levels first.

The main trend will change to down on a trade through $59.39, followed by $58.47.

The 200-day Moving Average at $67.21 is also a potential upside target.

The intermediate range is $71.61 to $58.47. Its retracement zone is $65.04 to $66.59. This zone is currently being tested.

The main range is $73.35 to $58.47. Its retracement zone at $65.91 to $67.67 is the next upside target.

Combining the two retracement zones makes $65.91 to $66.59 the best upside target.

Daily Technical Forecast

Based on the early price action, the direction of the August Brent crude oil market the rest of the session is likely to be determined by trader reaction to the 50% level at $65.04.

Bullish Scenario

A sustained move over $65.04 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for the rally to extend into the next 50% level at $65.91. This is followed by a short-term Fibonacci level at $66.59.

Overtaking $66.59 will indicate the buying is getting stronger with the next potential target the 200-day Moving Average at $67.21, followed by the main Fibonacci at $67.67. This is the trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under $65.04 will signal the return of sellers. If this move is able to generate enough downside momentum then look for the selling to possibly extend into $61.97 over the near-term. This is highly unlikely at this time unless today’s U.S. Energy Information Administration report is extremely bearish, peace breaks out in the Middle East or Trump and Xi cancel their meeting at the G-20 summit.

Overview

Given the easing of tensions between the US and Iran so far this week, and the upcoming meeting between Trump and Xi on Saturday, the price action today is likely to be controlled by the outcome of the EIA weekly inventories report at 14:30 GMT. It is expected to show a 2.7 million barrel draw down.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US