Market Analysis: The Price of Brent Oil Approaching the Highs of the Year

<img src="https://images.unsplash.com/photo-1516199423456-1f1e91b06f25?crop=entropy&amp;cs=tinysrgb&amp;fit=max&amp;fm=jpg&amp;ixid=M3wxMTc3M3wwfDF8c2VhcmNofDF8fG9pbHxlbnwwfHx8fDE2OTE1NjkzMTh8MA&amp;ixlib=rb-4.0.3&amp;q=80&amp;w=2000" alt="Market Analysis: The Price of Brent Oil Approaching the Highs of the Year" /><p>The price is driven up by:</p><p>→ the policy of limiting oil production by OPEC+ countries. For example, Saudi Arabia last week announced a cut in production by 1 million barrels per day until the end of September, adding that the decision could be extended. Russia is also reducing production volumes. We wrote about the scenario of increasing growth in the price of Brent oil due to production cuts in a post <a href="https://fxopen.com/blog/en/market-analysis-results-of-the-opec-meeting/">dated</a> July 7;<br>→ hopes/rumors that the Chinese authorities will stimulate the economy, which is not recovering enough after the lifting of COVID-related restrictions.</p><p>Selling pressure is driven by:<br>→ raising rates by Western central banks to fight high inflation.</p><p>Under the influence of these and other factors, the price of Brent oil rose close to the highs of the year around USD 87 per barrel, forming an upward channel. At the same time, in August, the price bounced strongly from its lower border twice, indicating the strength of demand. On the other hand, the progress of the bulls in the formation of the August high is very small, if you compare this peak with the previous one, set on the 2nd of August — a sign of the exhaustion of the bullish momentum.</p><p>It is reasonable to assume that the market can find a balance at current levels, and the price will enter the consolidation range, as holders of long positions can take profits after the increase in the price of Brent oil by more than 14% since July 1. At the same time, false breakdowns of the high of the year are not ruled out.</p><figure><img src="https://fxopen.com/blog/en/content/images/2023/08/9a1.png" alt="Market Analysis: The Price of Brent Oil Approaching the Highs of the Year" loading="lazy" width="2000" height="1099" srcset="https://fxopen.com/blog/en/content/images/size/w600/2023/08/9a1.png 600w, https://fxopen.com/blog/en/content/images/size/w1000/2023/08/9a1.png 1000w, https://fxopen.com/blog/en/content/images/size/w1600/2023/08/9a1.png 1600w, https://fxopen.com/blog/en/content/images/size/w2400/2023/08/9a1.png 2400w" sizes="(min-width: 720px) 720px" /></figure><p>Important levels:<br>→ USD 87.15 – resistance of the high of the year;<br>→ USD 86.45 – resistance from August high;<br>→ borders of the ascending channel.</p>