Brent crude oil price has failed to gain any strength since the start to the year. Most of the price action has occurred within the $70-$86 range. Brent crude price is also showing a strong correlation to the economic activity in China, which is still far from fully recovered.
On Tuesday, Brent oil price finally turned green after three consecutive days of sell-off. The British benchmark oil dropped 3.91% on Monday in a very bearish start to an important week. At the time of press, crude oil futures were changing hands at $72.62.
Brent Oil Price Retests Support Ahead Of CPI Report
The concerns about the slow economic growth in the US and China have deepened in the past few weeks. Analysts are expecting a decline in demand from the US in the coming months as the debt ceiling talks continue. The recent economic data shows that the Chinese economy is still far from being fully recovered after the end of restrictions.
Brent crude oil price is currently having a bounce from its May lows. The CPI data for May 2023 is set to be released today. This will keep the prices volatile for the rest of the day. In fact, I expect the volatility to continue for the rest of the week as the FOMC meeting is going to be held tomorrow.
Brent Crude Oil Price May Tank Below $60
Advanced technical analysis of Brent Oil price chart reveals that the price is forming a very bearish pattern on the daily timeframe. This pattern is known as the inverted cup & handle pattern, which usually results in a massive downside move. The neckline of this pattern lies at $71, which the bulls need to hold.
A breakdown below the neckline will make Brent crude oil price prediction very bearish. This will put the $60 price target on the cards, which comes from the measured move of a potential inverted cup & handle breakdown. To avoid this bearish outlook, bulls need to break above the downward trendline in the coming days.
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