The oil market has seen significant inventory builds due to weaker demand and softer economic data. This has led to more pressure on Brent crude oil following the delayed and current EIA data. The next levels of support and resistance are at $71.45 and $82, respectively. Brent now trades around the 50% Fibonacci retracement of the broader 2020 to 2022 advance, well below the $82 and psychological $80 markers. US and WTI crude charts reveal a similar move, and the IG client sentiment is mixed despite net-long positioning.
The weekly chart shows the major 2020 to 2022 advance with multiple geopolitical shocks, and Brent and WTI prices have been declining due to the global growth slowdown. OPEC may be considering further supply cuts due to the worsening economic data. The mixed IG client sentiment makes it challenging to predict future oil prices. Clients are net-long but are less net-long than last week.
The US storage data has revealed massive inventory builds. This has simply exacerbated the current sell-off. However, there is no clear indication of future price paths, and the analysis makes use of chart patterns and key support and resistance levels. For more information, you can visit the comprehensive education library.
