Since the Start of the Week, Brent Oil Price Has Dropped over 4%

At the beginning of the week, March 15, we wrote that the price of Brent oil could form a correction from the resistance level of USD 91 per barrel. Since then, the price has decreased by more than 4% due to a number of factors:

→ easing concerns about the escalation of the conflict between Israel and Iran. Iran is the third-largest producer in the Organization of Petroleum Exporting Countries, according to Reuters, and easing its conflict with Israel reduces the likelihood of supply disruptions in the Middle East.

→ reduction in oil consumption. JP Morgan analysts noted this week that global oil consumption in April stood at 101 million barrels per day, 200,000 barrels below forecast.

→ growth in oil reserves in the USA. Crude oil inventories rose 2.7 million barrels last week, the EIA reported.

Technical analysis of the Brent oil chart shows that the price has declined to the lower boundary of the intermediate ascending channel (shown by black lines), as expected. This means that the market may experience a rebound from the level of $86, where the support zone is located, which is formed by:

→ median line of the long-term blue channel;

→ lower border of the intermediate black channel.

We note that the development of bearish sentiment will be hampered by the so-called risk premium associated with geopolitical factors.

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