- Summary:
- Brent crude oil price is down 18% in the last two weeks.
- Analysts are expecting the supply to remain elevated throughout the first half of the current year.
- ING Group has slashed its 2023 price forecast from $98 to $90.
Brent crude oil price is playing out exactly as discussed in our last week’s analysis. The UK benchmark Brent crude price has sunk to its fresh yearly lows once again as investors expect an economic slowdown. The ongoing banking concerns also offset the uptick in demand from China since the country lifted the restrictions.
Brent oil price turned negative again on Monday after opening above its previous close. Till press time, it was trading at $71.38 per barrel after falling 1.64% since yesterday. The WTI Crude also showed similar price action and was traded at $65.56.
Brent Crude Supply To Remain High
Due to the more-than-expected supply of Russian oil in the market, Brent crude oil price is struggling. Consequently, analysts are looking up to OPEC to decrease its output. A reduction in production by OPEC can give the price some strength amid a strong sell-off. The banking issues in the US and Europe are further creating panic in the markets.
Recently, ING Group has also lowered its Brent oil price outlook from $98 to $90 for the current year. The fourth quarter forecast from the Deutch financial group also got slashed from $110 to $100. Within the next few days, the price action will remain volatile due to the upcoming FOMC meeting and the rate hike decision on 22nd March.
Brent Crude Oil Price Still Has More Downside
Considering the daily chart of oil futures, the price appears to be heading towards a retest of its November 2022 low of $65.79. There seems to be strong support at this level due to multiple bounces in the past. If this Brent crude oil price gets realized, then it will be a 6.88% drop from the current level.
In event of a sudden reclaim of the $75 level, a move up to the $82 level is still likely. However, considering the current global financial situation, the bearish scenario appears to be more probable. The prevailing risk-off approach in the market will also play a significant part in the coming days.
