Early in another week of July, the oil market is looking neutral: market concerns about lack of decisions from OPEC+ sputtered out, while weekly reports on the Natural Gas Storage and Crude Oil Inventories are already included in prices. As a result, Brent is trading at $75.40.
The cartel and its allies will have to come to an agreement anyway: the global economic recovery will require more energies, and if OPEC+ wants to preserve market stability, as well as the balance between supply and demand, it will have to find a compromise. It doesn’t mean that the direct confrontation between the cartel and UAE disappeared but the parties are highly likely to come to a compromiseб at least for a while.
Given the current recovery rates, the global supply shortage is estimated at 3 million barrels per day. OPEC+ has good chances to eliminate this gap.
The USA is still influenced by a seasonal factor, which affects weekly reports on the Crude Oil Inventories and they show slight declines. It allows bulls to remains quite active.
In the H4 chart, after updating the highs, Brent is still forming the correctional wave. Today, the asset may reach 72.24. After completing the correction, the instrument may resume trading within the uptrend with the target at 78.00. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is still moving below, thus indicating the correctional wave.
As we can see in the H1 chart, the situation is pretty similar. Brent continues correcting downwards and may soon reach 72.24. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: its signal line is moving below 25, thus indicating that the correction continues.