Crude oil price continues to feel the pressure from the persistent supply/demand imbalance. The upcoming US inventories data for the week leading to Independence Day will further influence the demand outlook during the country’s peak travel season.
At the start of the week, top crude oil exporters Russia and Saudi Arabia announced supply cuts in an effort to boost the commodity’s prices. Even so, woes over the slowing down of the global economy have overshadowed the move.
In fact, some investors see the OPEC+ member states’ decision as an admission of the struggling demand. From this perspective, crude oil price will likely remai below the previously steady support zone of $80 per barrel for a while longer.
On Wednesday, Morgan Stanley lowered its crude oil price forecast , citing the ongoing supply/demand imbalance. The bank expects a market surplus in the first half of 2024 as demand grows at a slower pace than non-OPEC supply.
4th July, which is US Independence Day marks the start of the peak travel season. The crude oil inventory data scheduled for Thursday will highlight the commodity’s demand over the holiday’s weekend. A higher-than-expected decline in stockpiles may further boost oil prices.
Brent crude oil price prediction
Brent crude oil price, the benchmark for global oil, extended previous gains on Wednesday amid its week-long rebound. While the rise has had it trade above the 25-day EMA as shown on its daily chart, the 50-day MA is still a major resistance level.
For two months, the once steady support zone of 80.00 has remained evasive for the commodity. As at the time of writing, Brent crude oil price was at 76.71.
In the short term, the bulls will be keen on breaking past the resistance at 76.25. If successful, the next level to watch out for will be 78.73. On the lower side, the zone of 73.50 may continue to offer support to Brent crude oil price.