Crude Oil is Feeling Down Again

 | Nov 22, 2021 11:08

Early in another November week, the Brent price went down again – it is trading at $78.75 and remains below the psychologically important level of $80, thus making market players very nervous.
 
It is all down to “infoglut” relating to the parameters of the demand for commodities. Negotiations between the US, India, China, and Japan that took place last week have already “born fruit”. For example, Japan said it might open up its strategic reserves. China was also ready to consider in detail this issue. It is believed that if the US moves from words to deeds and “unleashes” some of its reserves, oil prices will drop even deeper.
 
It’s safe to say that by the end of the year the global oil market may experience supply surplus even if OPEC+ leaves the extraction parameters unchanged during its December meeting.
 
In the H4 chart, after rebounding from 85.85, completing the descending wave at 81.33, and then forming a new consolidation range around the latter level, Brent has broken it to the downside at 79.50 and may later continue falling with the short-term target at 76.90. After that, the asset may correct to return to 81.33 and then form a new descending structure to reach 76.55. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving below 0 within the histogram area, which implies a descending wave on the price chart. After this wave is over, the line is expected to grow towards 0.