Following five consecutive days of gains, Brent crude oil prices are now in a consolidation phase, with a slight retreat to 81.80 USD per barrel. The market sentiment has been influenced by OPEC’s downward revisions of its demand forecasts for 2024 and 2025. These revisions are a response to weaker economic data coming out of China and reduced regional demand projections.
OPEC now predicts that global oil demand will grow by 2.11 million barrels per day in 2024, down from its previous forecast of 2.25 million bpd. For 2025, the projection has been revised to 1.78 million bpd from 1.85 million bpd. The primary reason cited for these revisions is the sluggish economic indicators from China, a key driver of global oil demand.
The ongoing conflict in the Middle East continues to keep market participants on edge. There is speculation about a new round of negotiations scheduled for Thursday, but uncertainty remains about whether they will take place. Concerns are particularly high about the potential for escalated conflicts involving Israel and Iran, which could disrupt oil supplies from the region and lead to increased volatility in oil prices.
From a technical standpoint, the Brent crude oil price is currently forming a consolidation range around 78.75 USD, with an upward breakout pushing it towards 81.97 USD. The MACD indicator, although below zero, shows a clear upward trajectory, supporting a bullish scenario. On the H1 chart, Brent has found support at 78.44 USD and is on track to reach 81.97 USD. The stochastic oscillator near the 20 mark also indicates the potential for upward movement, in line with the broader bullish sentiment observed on the H4 chart.
The recent revisions to OPEC’s demand forecasts have had a noticeable impact on Brent crude oil prices. The reduced projections reflect concerns about weakening global oil demand, particularly driven by economic indicators from China. Geopolitical tensions in the Middle East add further uncertainty to the market, as potential conflicts between key nations could disrupt oil supplies. From a technical perspective, indicators suggest that the price of Brent crude oil is likely to continue its upward trend, despite the current consolidation phase. Investors and market participants will need to closely monitor these factors to make informed decisions moving forward.