Brent Crude Oil Price Hits Highest Since 1 May

FXOpen

As the chart shows, yesterday the price of Brent crude oil rose to $84.40, which is the highest level since 1 May 2024.

The demand for Brent crude oil was driven by the following factors:

1. The holiday season and increasing consumption from automotive and aviation transport. We wrote about this in the Brent market analysis on 11 June. Let us recall that Goldman Sachs analysts suggest that by the end of the summer, the price of Brent may rise to $86 per barrel with a “ceiling” around $90.

2. Geopolitical tension, namely:
→ Ukrainian drone strikes on Russian oil refining bases.
→ The likelihood of escalation in the Middle East. For instance, Reuters reports that Israel’s Foreign Minister Israel Katz warned of an impending “total war” with Lebanon’s Hezbollah, which is backed by Iran.

Meanwhile, the technical analysis of the Brent crude oil price chart shows that:
→ The price continues to be within the narrowing triangle (shown in blue), which we wrote about on 11 June, but has risen above its median, approximately at the $83.0 level.
→ Additionally, the price is consolidating above the descending trend line (shown in red).
→ The fact that today the Brent price is pulling back after setting yesterday's high appears to be a false bullish breakout of the 29 May peak.

It is possible that, by forming a bull trap, the price will retreat to the median around the $83 level. Additional support could be provided at $81.66, where the bulls found support before breaking through the red line.

However, with the prospect of an increasingly hot summer, the price may continue to rise to the upper boundary of the channel, thereby confirming the Brent crude oil price forecast by Goldman Sachs analysts.

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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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