Brent crude oil price has been in the midst of recovery after a major pullback in April 2023. The recent production cuts by OPEC+ appear to have failed to keep Brent crude price higher as the price retested its yearly lows this month. The decrease in output led to an initial surge which took the price to the $87.45 level.
However, the pump was short-lived, and Brent oil price is currently trading 14.5% below those highs. On Wednesday, Brent crude turned green after a 1.10% drop on Tuesday. This also translates into a weekly gain of 1.73%. Our analysis shows that the price is forming a bearish pattern.
Brent Oil Price Drops Amid Economic Fears
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 bounced last week but couldn’t gain momentum despite the US YoY inflation hitting its 12-month low. A strong bounce in the DXY index has also increased the selling pressure since last week.
Brent Crude Oil Price Hangs By A Thread
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. Nevertheless, bulls still have some time as the pattern is still far from complete. For bearish confirmation, bears need to push the price below its 71.4 support.
A breakdown below the $71.4 support will put Brent crude oil price prediction of $60 on the cards. This price target comes from the measured move of a potential inverted cup & handle breakdown. Before this level, the price may also get some support from the $65 level. To avoid this bearish outlook, bulls need to break above the downward trendline in the coming days.
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