Current trend

Brent Crude Oil prices are under pressure, testing the support level of 77.46.

According to analysts’ forecasts, OPEC is ready to begin winding down the production cut program introduced in 2020 after the drop in demand for energy resources during the COVID–19 epidemic. The eight cartel members likely intend to increase production by 180.0K barrels per day in October 2024 relative to the 2.2M barrel reduction program but other restrictions not related to the main ones will be maintained.

Low oil demand in China and the United States, the world’s two largest oil consumers, may put additional pressure on the quotes. Thus, the Chinese August manufacturing PMI amounted to 49.1 points, below the forecast of 49.5 points and 49.4 points earlier, as a result of which the government intends to implement plans to increase consumption stimulation for households.

The long-term trend remains downward. The price is trying to consolidate below the support level of 77.46, after which it will be able to reach 75.40 and the December low of 72.98. In case of a reversal at 77.46, an upward correction to the 81.32 area will begin, where short positions, with the target at 77.46, are relevant. In case of a breakout of the 81.32 area, the trend will reverse upwards.

The medium-term trend is also downward. The quotes tested the key resistance zone of 81.60–81.07 and fell to the August low of 75.91, below which they could not consolidate, starting an upward correction. For the negative dynamics to continue, a breakdown of the 75.91 level is required, after which zone 3 (74.51–74.05) and zone 4 (70.23–69.80) are expected to be reached. In case of a breakout of 81.60, a change in the trend to an upward one to zone 2 (86.93–86.40) is likely.

Support and resistance

Resistance levels: 81.32, 82.88, 86.10.

Support levels: 77.46, 75.40, 72.98.

Trading tips

Short positions may be opened from 81.32, with the target at 77.46 and stop loss 82.88. Implementation period: 9–12 days.

Long positions may be opened above 82.88, with the target at 86.10 and stop loss 81.40.