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18.06.2024

Buying Brent with target at $84.55 per barrel

Currently, according to the CME Group data, the open interest on oil contracts is 1091769 for call options and 755549 for put options. Thus, the buy/sell ratio is at the level of 1.45. However, it is necessary to mention that this ratio has not changed since yesterday. 


The CFD market sentiment on Brent oil today is also estimated as optimistic, with the ratio of buy positions to sell positions averaging 60/40.


According to the International Energy Agency’s forecast, the optimal price level for Brent for the second and third quarters of 2024 is in the range from 83 to 85 dollars per barrel. Within this price range, the opportunities and interests of oil producers and consumers are well-balanced. Since the Brent price moves within this range now, internal fluctuations will probably be driven by technical oversold/overbought conditions in relation to the boundaries of the range. Geopolitical events, which may trigger a surge of volatility in the energy market, are not excluded as well.


In addition, the U.S. Energy Information Administration forecasts a widening gap between the volumes of oil production and consumption for the third quarter that could lead to a small oil deficit supporting prices.

In general, the aggregate of factors indicates that an upward movement of Brent quotes is

more possible than their decline.

If we consider the ongoing bullish trend, the likely target for Brent will be the price level of 84.55.


The overall recommendation is to buy Brent oil after correction to $83.5 per barrel

If such correction does not happen, it is better to refrain from the transaction.

Profit could be taken at the level of 84.55. A Stop-Loss may be set at 82.5.

The possible loss should not exceed 2% of your deposit funds.

 


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