Today, Brent crude oil prices took a nosedive, falling below $70 a barrel for the first time since December 2021. The OPEC+ monthly oil report contributed to the decline, citing concerns around China’s economic weakness as a key factor.
Market analysis suggests that there may be further downward pressure on oil prices in the near future. With growing bearish sentiment and technical indicators pointing towards a potential decline, investors are left wondering if there is more room for prices to drop.
OPEC Downgrades Forecasts, Impact on Global Oil Demand
The latest OPEC report revealed a downgrade in oil demand growth forecasts for 2024, marking the first revision since July 2023. The oil cartel adjusted its 2024 figures from 2.11 million bpd to 2.03 million bpd, with China playing a significant role in the downward revision.
Following OPEC+’s decision to halt production increases, the market is closely monitoring upcoming IEA data and API reports to gauge the future direction of oil prices.
Technical Analysis and Market Outlook
From a technical standpoint, oil prices have been on a downward trend since failing to breach the $80 per barrel mark in August. The recent OPEC downgrades, coupled with concerns over Chinese imports, have added to the bearish sentiment in the market.
Currently trading at levels last seen in December 2021, oil prices face support at the current price level, with the potential for further losses as they break out of a multi-year consolidation range. While short-term pullbacks may occur, selling pressure is expected to persist on any attempted rallies.
Key support levels for Brent crude oil are at 69.50 and 68.17, with resistance at 69.50 and 70.00.
Brent Crude Oil Daily Chart, September 10, 2024
Source: TradingView
Support
Resistance
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