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Weekly Crude Oil Prices Forecast Sep 10, 2023

Weekly Oil Prices Forecast and Technical Analysis

As the Brent crude oil price broke out 88 USD, it entered a new rising trend, and we predicted that it could reach the levels of 95 and 100 USD in the next weeks.

As you see in the chart below, last week when the price reached the dynamic resistance line in the price range of $91, it could not break and remained in the range of $90 for three days.

For the next week, it is predicted that if the price brakes the resistance of $91, it can reach $95 at the 50% Fibonacci retracement level. But if the price cannot cross 91, there will be a pullback to the $88 key support.

Crude Oil Prices Forecast Sep 10,2023

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Oil Jumped After OPEC+ Fueled Rally

Oil prices on Tuesday jumped nearly 3% to the highest since November after OPEC+ heavyweights Saudi Arabia and Russia announced an extension of their respective production cuts.

Brent crude futures for October delivery climbed 2.2% to $91.08 a barrel, while front-month Nymex crude oil futures for October rose 2.7% to $88.02 a barrel, before giving up some of those gains later on Wednesday.

Crude prices have now climbed about 30% since mid-June mainly on lower global supplies.

Back in July, Saudi Arabia announced it would cut one million barrels a day, equivalent to ~10% of its typical output while Russia’s voluntary cut is 300,000 barrels a day. Saudi Arabia’s reduction makes up more than a third of the total OPEC+ cuts.

Last month, commodity analysts at Standard Chartered projected large inventory draws peaking at 2.9 mb/d in August. StanChart estimates that June demand was about 0.5 mb/d below August 2019’s all-time high, but said the record would be exceeded in the current month. According to the analysts, highly effective producer output restraint, led by Saudi Arabia, will create the conditions for a price rally that will take Brent prices onto their Q4-average forecast at $93/bbl, with a likely intra-quarter high above $100/bbl.

Meanwhile, U.S. shale output has continued to grow. The Energy Information Administration (EIA) has forecast total U.S. output will hit 12.61M bbl/day in the current year, eclipsing the previous record of 12.32M bbl/day set in 2019’s and easily beating last year’s 11.89M bbl/day.  U.S. crude oil output is up 9% Y/Y, which under normal circumstances would blunt OPEC’s efforts to keep supplies low in a bid to goose prices. There is little doubt the U.S. Shale Patch is largely responsible for keeping oil markets well supplied and oil prices low: Rystad Energy has estimated that whereas OPEC and its allies have announced cuts amounting to ~6% of 2022’s production, non-OPEC supply has made up for two-thirds of those cuts, with the U.S. accounting for half of that. Thankfully, U.S. output is unlikely to go high enough to put significant pressure on global oil prices.

Publish for those interested.

Weekly Crude Oil Prices Forecast Sep 10, 2023