Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
Brent Crude Oil Price Ripe For Correction Lower After OPEC Report

Brent Crude Oil Price Ripe For Correction Lower After OPEC Report

Talking Points

- The price of Brent crude oil slipped back Tuesday and in Asian trading Wednesday after an OPEC report forecast weaker demand growth for its crude.

- After the recent surge higher in the price, a deeper correction now looks possible.

What Does the Fourth Quarter Hold for Oil, Currencies and Other Key Markets? Find out here

The price of Brent crude oil, the global benchmark, slipped back Tuesday and in Asia Wednesday after the Organization of the Petroleum Exporting Countries’ 2017 World Oil Outlook forecast slower growth in demand for its crude than previously expected alongside an increase in supply from its competitors.

While the Tuesday fall was small, around 0.5%, it came after a lengthy climb that has taken the price from below $45/barrel in late June to current levels close to $64 and could be the start of a larger correction lower.

Chart: Brent Crude Daily Timeframe (June 1 – November 8, 2017)

Chart by IG

As the chart above shows, the 14-day relative strength index is currently above 70, suggesting the market is in ‘overbought’ territory and that a short-term correction, or at least a period of consolidation, could be on the way. The price is back to levels not seen since June 2015 and the latest Commitments of Traders Report from the US Commodity Futures Trading Commission showed total net-long positions in US crude at near-record highs, suggesting that speculative buying could slip back from here.

OPEC and non-OPEC countries are due to meet in Vienna on November 30 and the organization is seeking to achieve a consensus agreement before then on how long to extend a global pact to curb oil production, its secretary general said Tuesday.

--- Written by Martin Essex, Analyst and Editor

To contact Martin, email him at martin.essex@ig.com

Follow Martin on Twitter @MartinSEssex

For help to trade profitably, check out the IG Client Sentiment data

And you can learn more by listening to our regular trading webinars; here’s a list of what’s coming up

Check out our Trading Guides: Several new ones are now available including Forex for Beginners, Building Confidence and Traits of Successful Traders

Like to know about the Traits of Successful Traders? Just click here

Or New to Forex? That guide is here

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES