Brent to break below $80/bbl?

Brent may be set to book its 5 consecutive days of declines today, remaining under significant pressure following the higher than expected (1.83M - actual vs -2.55M - expected) EIA crude stock change reading.

Despite resilient global demand, Brent has retreated ~12% from this year's high of $92.18/bbl amid uncertainties over China's economic outlook and US interest rate policy.
 

Investors are now preparing for the OPEC+ meeting scheduled for June 1. The group, which includes Russia, is expected to extend its current supply cuts into the second half of 2024.

Currently, OPEC+ cuts stand at 2.2 million bbl/day and have been one of the key drivers of this year's growth. Tighter supply curbs could potentially lead to higher Brent.

According to Bloomberg’s market consensus Brent is expected to average 85.00 in Q1 2024.

On the technical side ...

The Relative Strength Index (RSI) is approaching it's lower border (<30 - oversold, >70 - overbought). If the RSI moves below 30, it could indicate the potential for a price reversal.

All three moving averages (21-, 50- and 100-period) are below the current Brent price, indicating a strong downward trend.

On the downside, $80/bbl may provide immediate support for the oil bulls, while on the upside, the 100-period SMA may be the next target/resistance level for the Brent bulls.