Brent crude oil price predictions have tilted towards the bearish end of the spectrum after the International Energy Agency (IEA) lowered its Q4 2022 demand growth forecast. In its monthly report, the IEA lowered its growth forecast for crude oil demand, calling for a rise of demand by 2 million barrels per day in Q4 2022 and 2.1 million barrels per day in 2023.
The IEA says that a drop-off in road transport demand is responsible for the tapered outlook, even as it expects demand from the aviation sector to increase. The IEA also said that switching from gas to oil for power production partially offsets the impact of China’s renewed lockdowns and the slowdown seen in the OECD countries.
The organization predicts more oil utilization for power generation to double in Q4 2022 and Q1 2023. The EU’s embargo on Russian oil imports will not dent the current market oversupply of nearly 1 million barrels per day. The IEA opines that this oversupply will balance out next year, the IEA opined.
Crude oil prices are also facing pressure from a stronger dollar, boosted by a higher-than-expected rise in the US consumer price index. This situation has heightened expectations that the Fed will raise rates aggressively when it meets next week.
Brent Crude Oil Price Prediction
Following Tuesday’s decline and bounce off the 91.32 support (16 February and 12 August lows), the price action was rejected at 93.20. This rejection needs to translate into a breakdown of the 91.32 support for downside targets at 86.72 (25 January low) and 83.12 (5 January high) to become available. 80.22 is an additional harvest point for the bears, formed by the 29 December 2021 low.
Conversely, a closing penetration above 93.20 supports a march toward 97.40 (28 February low and 18 August high). A continuation of the advance targets 100.92 (13 July high and psychological price mark), with 106.11 (19 May low) and 108.99 (28 July high) forming additional targets to the north.
Brent: Daily Chart
