Current trend

Benchmark Brent Crude Oil prices are correcting within a slight downward trend, trading at 84.00.

Experts associate the negative dynamics with expectations of OPEC gradually abandoning the oil production voluntary reduction. At the last meeting of the organization, the allies agreed that the current reduction of 2.2M barrels per day would be in effect until the end of the third quarter. Then, a gradual increase in production would begin, reaching the previous levels by October 2025. Thus, the indicator would increase by at least 2.2M barrels per day over the next year. In addition, yesterday, Deputy Prime Minister of the Russian Federation, Alexander Novak, told reporters that in October, the country may abandon the production cuts if the market situation requires it.

Also, the quotes are under pressure from macroeconomic statistics from China, the world’s second-largest oil importer. From January to June, the country purchased 275.48M tons of oil, 2.3% lower than a year earlier. However, natural gas purchases increased to 64.65M tons, exceeding last year’s value by 14.3%. Thus, Chinese energy imports are declining, restraining the growth of demand.

As for investment demand, according to the Chicago Mercantile Exchange (CME Group), at the beginning of the week, the oil futures trading volume amounted to 787.0K positions, an average figure for the beginning of the month, against 840.0–900.0K positions at the end of the previous week, affecting in the asset chart.

Support and resistance

On the daily chart, the trading instrument is moving in a corrective trend, approaching the resistance line of the downward channel 82.00–76.00.

Technical indicators are slowing the buy signal: fast EMA of the Alligator indicator are approaching the signal line, and the AO histogram is forming correction bars in the buy zone.

Resistance levels: 84.70, 87.60.

Support levels: 83.30, 80.50.

Trading tips

Short positions may be opened after the price declines and consolidates below 83.30, with the target at 80.50. Stop loss — 84.50. Implementation period: 7 days or more.

Long positions may be opened after the price grows and consolidates above 84.70, with the target at 87.60. Stop loss — 83.00.