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BRN reaches above the 50-period SMA

BRN reaches above the 50-period SMA

BRN price continues to rise 3rd day in a row, now trading above both 21 & 50-period SMAs.

The main line of support for the black gold has come from an ongoing geopolitical turbulence in the Middle East and the decline in US' crude production due to extreme weather conditions.

A recent escalation around the Houthi group and repeated attacks on maritime shipping routes in Red Sea continue to keep the risks elevated, thus pushing the BRN towards the $80/bbl.

In the US, a drop in temperatures interrupted the production with output levels decreasing to 700k bbl/day from the previous 1.35M bbl/day.


On the demand & supply sides …

The International Energy Agency (IEA) has revised it’s global demand outlook for 2024, stating that demand will reach 1.24M bbl/day (previously 1.06M bbl/day).

The OPEC’s forecasted consumption level currently sits at 2.25M bbl/day.

Markets looked reasonably well supplied (according to the IEA) in 2024. However, the potential for a surplus could emerge if OPEC+ was to revise it’s supply cuts in Q2 2024.

In addition to a potential oversupply, the possibility of having higher-for-longer interest rates is still looming over the world’s major oil consumer – US, which if realized may pressure the BRN.


From the technical perspective …

  • BRN’s recent climb above 50-period SMA (~78.612) may translate into a stronger bullish momentum
  • 21-period SMA (~78.018) may offer an immediate support if BRN bears try to drag the price towards the $76 round number
  • Relative Strength Index’s (RSI) position at 52.24 underlines the state of uncertainity on the market

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