Brent Crude Oil Price Hits Yearly Low

Analyzing the oil market on the XBR/USD chart from August 26, when Brent crude was trading around $79 per barrel, we observed the following:

→ The price was forming a descending channel (shown in red) and approaching its upper boundary, which could act as resistance.
→ We identified a key support level (shown in yellow).
→ We suggested that the bulls would need to prove their determination when facing a block of resistance around the $80 level.

Since then, Brent crude oil has:

→ Reversed downward, failing to hold above the $80 level, and continued to decline within the red channel.
→ Accelerated its decline, breaking through the key support around the $75 level.

Bearish sentiment was fueled by OPEC+ plans to increase oil production, signaling a shift away from production cuts aimed at maintaining higher prices.

Could Brent Crude Oil Continue to Decline?

From a technical analysis perspective, the XBR/USD chart today indicates that supply forces are asserting their dominance, as the price has fallen into the lower half of the red channel, with the RSI indicator entering oversold territory.

After a roughly 10% decline in Brent crude oil prices since last Monday, the prospect of an interim upward correction seems plausible.

However, given the above, a significant resistance block appears to be around the $74.50 area, where:

→ The median line of the red channel is located.
→ The yellow line, which served as support for several months, is likely to act as resistance after being breached.

In the worst-case scenario, Brent crude oil could drop to the lower boundary of the channel, approaching the psychological level of $70.

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