Weekly Commodities Review - 02 November

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For this week we move back to Brent Crude. The weekly chart details how price action has been in a strong bull run from the lows of $20 back in early 2020, and that despite the strong sell-off from the early 2022 highs this broad trend remains in place.

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The daily chart shows how price action has been able to gain slightly in recent days, but not enough scale yet to break the shorter-term negative trend that has been in place from the summer highs.

Will the longer-term bullish trend maintain control, or will the negative trend from summer 2022 knock prices lower?

Due to fundamental concerns about the state of the global economy overall demand has stayed relatively muted so far, it may as result prove difficult for buyers to stay motivated while risks over a global recession continue, which would coincide with the technical levels around $100.

If talk over a Fed pivot continues to build momentum prices here could break above $100 and allow the longer-term positive trend to continue, which would re-open the 2022 highs around $120. It remains difficult to see how price action could move much higher than that in the medium term without further output cuts, or a greatly improved global economic outlook for 2023.

Making any attempted moves back towards the $100 in the coming days of especially high interest. Moves above could allow for quite rapid gains up towards $120. But in order to push through the $100 area resistance and allow the longer-term trends to fully regain control there could yet be a period of consolidation around the $85-95 area.

Due to the strength of the longer-term trends moves under the $85 area lows are not seen as likely, which keeps a relatively optimistic medium to longer term view on Brent, albeit with upside caps around the $120 area, unless/until fundamental conditions improve.