Brent crude oil price has dropped to fresh weekly lows. The recent production cuts by OPEC+ appear to have failed to keep Brent crude price higher as the price retested its March lows last week. 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 14.5% down from the peak. On Friday, Brent crude turned red for the third day in a row with a 1% drop. This also translates into a weekly drop of 0.8%. Our analysis shows that the price is forming an extremely bearish pattern.
Brent Oil Price Drops Amid Recession 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 stalled. This has once again increased recession fears among the investors.
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 in the last couple of days.
Brent Crude Oil Price Forms Bearish Pattern
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. However, the pattern is still far from complete, and the bulls still have some time to save the day.
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.
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