- Brent Crude oil prices are rising despite a slight drop in demand from Asia in the first half of 2024.
- Inventories data will be important as US summer holidays get into full swing.
- Range breakout on the cards… is the $90 a barrel mark out of the question?
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Brent Crude continued its rise today as it eyes a range breakout. This is a surprise given that an oil report by LSEG Oil Research pointed to weaker demand from Asia in the first half of 2024.
Asia imported 27.16 million barrels per day (bpd) between January and June 2024, a slight drop off from last year’s 27.29 million bpd during the same period. The reason behind the marginal decline is a drop in Chinese imports as the world’s second largest economy faces its own challenges.
The report serves to underline a growing disconnect between forecasts from major bodies the International Energy Administration (IEA) and the Organisation of the Petroleum Exporting Countries (OPEC). It would seem at this stage that the IEA who recently trimmed its forecast down by some 100000 bpd may be closer to the mark. There are still 6 months left this year and with airports reporting robust flight bookings and the US summer holidays ahead, it remains to be seen which organization has it right.
Asia’s Crude Oil Import Numbers vs Brent Crude Price
Source: LSEG (click to enlarge)
US Data and Oil Inventories Ahead
The weekly oil inventory data from the EIA and API remain a key gauge for market participants. This is even more true as markets have been concerned that demand may rise in the US and have an impact on inventory numbers. As travel picks up and summer gets into full gear, any sign that inventories may be beginning to dwindle could help push oil prices higher.
Source: For all market-moving economic releases and events, see the MarketPulse Economic Calendar.
Technical Analysis on Brent Crude Oil
Oil prices appear ready to break a 9-day trading range between 84.70 and 86.21. Having moved above the range during the day today, a daily candle close above the 86.32 handle bodes well for bulls eyeing a return to the 90 a barrel mark.
A daily candle close back inside the 86.21 resistance level and a retest of support at 84.70 appears inevitable. This is a particular area of interest as the 100-day MA rests around the same level and could help support prices.
Brent Crude Daily Chart, July 1, 2024
Source: TradingView.com (click to enlarge)
Key Levels to Keep an Eye on;
Support
- 86.12
- 84.70
- 83.80
Resistance
- 86.95 (last week’s highs)
- 87.90
- 90.00 (psychological level)
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Zain Vawda
He has spent the last 3 years in an analyst role honing his skills across various financial domains, including technical analysis, economic data interpretation, price action strategies, and analyzing the geopolitical impacts on global markets. Currently, Zain is advancing in obtaining his Capital Markets & Security Analyst (CMSA) designation through the Corporate Finance Institute (CFI), where he has completed modules in fixed income fundamentals, portfolio management fundamentals, equity market fundamentals, introduction to capital markets, and derivative fundamentals.
He is also a regular guest on radio and television programs in South Africa, providing insight into global markets and the economy. Additionally, he has contributed to the development of a financial markets course approved by BankSeta (Banking Sector Education and Training Authority) at NQF level 6 in South Africa.
