The price of Brent crude oil is showing positive momentum, stabilizing at approximately $88.57 per barrel as of Monday. The market sentiment is predominantly bullish.
This upward trend is supported by encouraging economic data from both China and the United States. Specifically, China’s business activity outperformed expectations in August, lending some optimism to projections for oil demand. However, it’s worth noting that the strength of the U.S. dollar could act as a moderating factor on crude oil price gains.
In terms of supply, Baker Hughes’ recent statistics reveal that the count of active oil rigs in the U.S. remains stable at 512 units. Meanwhile, Canada saw a minor decline, with one rig going offline, bringing its total to 114 units.
Technical Analysis of Brent Oil
On the 4-hour chart for Brent, the price trajectory suggests robust growth. This upward movement can be interpreted as targeting a level of $93.93. Once this price target is achieved, a price correction to $87.70 is anticipated, potentially accompanied by a retest from above. Subsequently, analysts expect the price to climb to the initial target of $104.00. The Moving Average Convergence Divergence (MACD) indicator corroborates this outlook, with its signal line directed sharply upward, indicating the possibility of reaching new highs.
On the 1-hour chart, Brent has already seen a surge to $87.70, and a consolidation pattern has emerged around this price point. A breakout above this level has set the stage for an extension to $90.00, from where the upward trend could potentially continue to $93.93. The Stochastic oscillator lends technical support to this scenario; its signal line has bounced off the 20-point level and is advancing toward 50. Should it surpass this level, further upward movement to 80 is highly likely.
In summary, both short-term and medium-term technical indicators suggest that Brent oil prices are poised for further gains, although external economic factors could introduce some volatility.
