Brent Oil: Ready for a Rally?

Oct 11, 2023

Brent oil prices have skyrocketed in recent months, from about $70 a barrel in June to more than $90 a barrel today. This is due to a number of factors, including:

Fundamentals

• Tight supply:
  
• OPEC+ has cut output to support prices and there are concerns about supply disruptions from Russia due to the ongoing war in Ukraine.
  
• Strong demand:
  
• Global oil demand is recovering from the COVID-19 pandemic and is expected to continue growing in the coming months.
  
• Weaker US Dollar:
  
• A weaker US dollar makes oil more affordable for buyers using other currencies.

Technicals

• 30-minute chart: Brent oil is currently trading in a bullish trend channel on the 30-minute chart. The RSI indicator is above 50, suggesting that buyers are in control. The MACD indicator is also bullish, with the MACD line above the signal line and the histogram turning positive.
  
• 4-hour chart: On the 4-hour chart, Brent oil is also trading in a bullish trend channel. The RSI indicator is above 50, and the MACD indicator is bullish, with the MACD line above the signal line and the histogram turning positive.
  
• Daily chart: On the daily chart, Brent oil is trading above its 200-day moving average, which is a bullish signal. The RSI indicator is above 50, and the MACD indicator is bullish, with the MACD line above the signal line and the histogram turning positive.

Conclusion

• Overall, the fundamental and technical outlook for Brent oil is bullish. Prices could continue to rise in the coming days and weeks, especially if there are any supply disruptions or if the US dollar continues to weaken.