- Brent Oil falls below 46.62 to trade at its lowest level in 7 months
- The market has dropped around $9 since last month’s OPEC meeting
- US inventory data could drive the market in the coming days
Brent Oil has taken another leg lower today with the market falling to levels not seen since mid November. There’s no major catalysts for the decline although comments from Russia that it has no plans to meet with US oil shale producers are certainly not doing oil bulls any favours.
Brent has now made a clean break below prior support at 46.62 and price is currently trading below the level it was when OPEC first agreed to cut production at the end of last November (marked OPEC I). The decline peak to trough since the most recent OPEC meeting (marked OPEC II) is now around $9 with there being only 4 out of the last 18 daily sessions ending higher.
Brent Oil has fallen strongly since the most recent OPEC meeting (OPEC II) and now trades clearly below the level seen when the group first announced production cuts last November (OPEC II)
The next level of swing support comes in at 43.67 and in the absence of any clear reversal signals the downtrend could take the market to this level in the coming days. Bulls would want to see a move back above 46.62 before any hopes of a reversal can be supported.
XTB clients are bullish on this market with 87% in long positions.
Looking ahead there’s the API inventory release due out tonight around 9:30 PM (BST) before the more widely viewed DOE equivalent tomorrow at 3:30 PM (BST). Tomorrow’s number is expected to show a drawdown of 1.2M barrels in the past week compared to a decline of 1.7M last time out. 10 of the last 11 DOE inventory releases have shown declines but despite this the price of oil has failed to gain traction.