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Brent Crude Oil ($BRENT) Commodity Forecast: Down 5.1% Today

Morpher AI identified a bearish signal. The commodity price may continue to fall based on the momentum of the negative news.

What is Brent Crude Oil?

Brent Crude Oil is a key benchmark for global oil prices, representing the price of oil extracted from the North Sea. The market for Brent Crude Oil is heavily influenced by factors such as supply and demand dynamics, geopolitical events, and global economic conditions.

Why is Brent Crude Oil going down?

BRENT commodity is down 5.1% on Sep 4, 2024 4:06

  • Brent Crude Oil dropped towards $73 per barrel today, marking its lowest level since December 2023.
  • Concerns over rising supply contributed to the market movement, with potential agreements in Libya to resume oil production, potentially adding over 500,000 barrels per day.
  • OPEC's plan to increase production in the fourth quarter, alongside economic growth worries in China and the US, further impacted oil prices negatively.
  • Increased supply expectations, declining factory activity in key markets, and ongoing demand uncertainties collectively led to the bearish trend in the market for Brent Crude Oil today.

BRENT Price Chart

BRENT News

Brent Sinks to December Levels

Brent crude oil futures fell toward $73 per barrel on Wednesday, hitting its lowest level since December 2023, weighed down by concerns over rising supply. A Bloomberg report indicated that Libya's rival governments might be close to a deal that could resume oil production after recent disruptions. The potential agreement to restore oil supply could lead to over 500,000 barrels per day re-entering the market. Additionally, oil prices are under pressure from OPEC's plan to increase production in the fourth quarter and ongoing demand worries from key markets. New data from China raised concerns that economic growth in one of the world’s largest oil consumers may not rebound this year, as key factory demand indicators dropped sharply in August. Moreover, the ISM Manufacturing PMI on Tuesday revealed that US factory activity contracted for a fifth consecutive month, and at a slightly faster pace than expected.

Brent Holds Decline on Higher Supply Prospects

Brent crude oil futures held around $77 per barrel on Tuesday after facing heavy selling pressure in recent sessions, weighed down by growing expectations of higher supply. OPEC recently announced plans to increase production, with eight OPEC+ members seen raising output by 180,000 bpd. Additionally, pessimism about Chinese demand growth intensified after an official survey showed factory activity fell to a six-month low in August, with declining factory prices and reduced orders. This followed EIA data showing that US oil consumption in June dropped to its lowest seasonal level since 2020, heightening demand fears from key markets. Limiting further price declines were supply disruptions in Libya, where the state oil company declared force majeure on its key El-Feel field on Monday as the production shutdown widened.

Brent Holds Decline on Higher Supply Expectations

Brent crude oil futures fell to around $76.5 per barrel on Monday, extending the previous session's over 2% decline, as OPEC’s plan to increase production next quarter weighed on the market. The increase, starting in October, will see eight OPEC+ members raise output by 180,000 bpd, partially reversing recent 2.2 million bpd cuts while maintaining other reductions until late 2025. Demand concerns were also heightened after China’s factory activity dropped to a six-month low in August, raising fears about the Chinese economy missing growth targets. This follows EIA data showing US oil consumption in June slowed to its lowest seasonal levels since the 2020 pandemic. Meanwhile, a Reuters report showed that Libya's Sarir, Messla, and Nafoura oilfields have been instructed to resume operations following a political standoff that had closed most of the country’s oilfields.

Brent Crude Down, Set for 2nd Month of Declines

Brent crude futures dropped over 2% toward $77 per barrel on Friday following reports that OPEC+ will proceed with planned output hikes in the fourth quarter. Despite some debate within the group, the increase is expected to start in October. Oil is set for its first consecutive monthly losses this year, with Goldman Sachs and Morgan Stanley lowering price forecasts due to weak demand from China, the world's largest importer. However, U.S. economic growth was revised upward for Q2, boosting sentiment, and crude inventories in the U.S. are at their lowest since January, with Cushing, Oklahoma stockpiles at their lowest since November. Meanwhile, Libyan output is at risk of further decline amid escalating domestic unrest.

Brent Set for 2nd Monthly Loss

Brent crude oil futures traded around $79 per barrel on Friday, poised for a second consecutive monthly decline due to lingering demand concerns. Ongoing worries about China's slowing economy, which is expected to miss growth targets, are heightening fears of reduced demand in Asia. This aligns with recently lowered oil forecasts from major banks, which cite economic troubles in key markets, shifts in vehicle fleets, and sluggish manufacturing. Meanwhile, concerns about tight global supply have prevented further declines in oil prices. Reuters reported that Iraq plans to cut oil production in September to compensate for exceeding its OPEC+ quota. This follows Libya's halt of operations at five key export terminals, which has more than halved its oil output, while tensions continue to escalate in the Middle East. Additionally, the US economy showed modest growth in the second quarter, boosting investor confidence.

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Brent Crude Oil Price History

04.08.2024 - BRENT Commodity was down 5.0%

  • Heavy selling pressure hit Brent Crude Oil on account of expectations of heightened supply, with plans for increased production by OPEC and lower demand signals in China.
  • Reports of reduced US oil consumption, the lowest since 2020, exacerbated concerns about demand, adding to the bearish trend.
  • Despite supply disruptions in Libya, worries persisted over heightened supply and weakened demand from major economies such as China.
  • Ongoing concerns regarding China's economic slowdown and reduced growth targets influenced market sentiment, raising worries about declining demand in Asia and contributing to the prevailing bearish movement in the Brent Crude Oil market.

04.08.2024 - BRENT Commodity was down 5.1%

  • Brent Crude Oil dropped towards $73 per barrel today, marking its lowest level since December 2023.
  • Concerns over rising supply contributed to the market movement, with potential agreements in Libya to resume oil production, potentially adding over 500,000 barrels per day.
  • OPEC's plan to increase production in the fourth quarter, alongside economic growth worries in China and the US, further impacted oil prices negatively.
  • Increased supply expectations, declining factory activity in key markets, and ongoing demand uncertainties collectively led to the bearish trend in the market for Brent Crude Oil today.

04.05.2024 - BRENT Commodity was down 5.0%

  • Brent Crude Oil experienced a strong bearish movement, dropping to a 4-month low due to concerns over higher supply and weak demand growth.
  • OPEC+ decision to extend output cuts, but gradually unwinding voluntary cuts from member countries, contributed to the downward pressure on oil prices.
  • Economic weakness in the US, fears of the US Federal Reserve not cutting interest rates, and uncertainties surrounding China's demand added to the negative sentiment in the oil market.
  • The combination of these factors led to Brent Crude Oil hitting an 11-week low, reflecting the ongoing challenges faced by the oil market amidst a complex supply-demand landscape.

13.09.2023 - BRENT Commodity was up 5.5%

  • Brent Crude Oil experienced a strong bullish movement due to several factors:
  • Geopolitical risks in the Middle East, particularly the conflict in southern Israel and Gaza, raised concerns about potential supply disruptions.
  • The US imposed sanctions on owners of tankers carrying Russian oil priced above the G7's price cap, which added to supply concerns.
  • OPEC's expectation of a decline in global crude stockpiles and their forecast for global oil demand growth also contributed to the bullish sentiment.
  • Despite a significant increase in US crude inventories, the market remained focused on the potential impact of geopolitical events and supply-side concerns.
  • Overall, the bullish movement in Brent Crude Oil can be attributed to geopolitical tensions and supply-side factors, despite the increase in US crude inventories.

16.10.2023 - BRENT Commodity was down 5.2%

  • Brent Crude Oil experienced a bearish movement due to increasing signs of low demand and eased concerns of scarce supply. Refinery throughput in China fell, pointing to lower industrial fuel demand, and US crude oil stocks increased significantly.
  • The International Energy Agency (IEA) and OPEC provided conflicting assessments on global oil supply and demand. The IEA stated that the oil market won't be as tight as initially thought due to better-than-expected production growth in the US and Brazil, while OPEC emphasized strong growth trends and healthy fundamentals.
  • Financial market speculators were attributed as a cause for the recent price drop by OPEC. This suggests that market sentiment and speculation played a role in the bearish movement.
  • The recent volatility in oil prices was influenced by mixed cues, including risk-on rally driven by soft US inflation data, OPEC's reassurance of strong fundamentals, and the weaker dollar.
  • Overall, the bearish movement in Brent Crude Oil can be attributed to factors such as low demand, increased supply, conflicting assessments on global supply and demand, and market speculation.

03.05.2024 - BRENT Commodity was down 2.6%

  • Brent Crude Oil witnessed a bearish movement today, slipping below $82 per barrel.
  • Market sentiment was influenced by concerns regarding demand uncertainties and apprehensions of prolonged high interest rates by the US Federal Reserve, which could potentially dampen economic growth and lower oil demand.
  • Despite recent data indicating a draw in US crude inventories, lackluster demand before the Memorial Day weekend and expectations of subdued energy demand worldwide weighed on oil prices.
  • The choice by OPEC+ to prolong supply cuts until 2025 and reassess voluntary cuts further intensified the downward pressure on Brent Crude Oil prices.

04.09.2023 - BRENT Commodity was down 5.6%

  • The bearish movement in Brent Crude Oil can be attributed to the following factors:
  • 1. Strong US economic data: The release of positive US economic data boosted the dollar and Treasury yields, leading to a selloff in risk assets, including oil. This increased the attractiveness of the dollar as an investment and put downward pressure on oil prices.
  • 2. OPEC+ output policy: The OPEC+ group, which includes major oil-producing countries like Saudi Arabia and Russia, decided to extend voluntary supply cuts until the end of the year. This decision, combined with tightening global crude supply, provided support to oil prices. However, the lack of any changes in the output policy during the OPEC+ meeting added to the bearish sentiment.
  • 3. Market outlook and global supply: Traders continued to assess the market outlook, considering factors such as the fuel export ban implemented by Russia and the potential for additional oil flows from the Iraq-Turkey pipeline. These factors, along with the falling crude inventories in the US, influenced market sentiment but were not enough to counter the overall bearish trend.
  • 4. Strong dollar and surging Treasury yields: The strength of the US dollar, reaching fresh ten-month highs against a basket of peers, and the rally in Treasury yields contributed to the bearish movement in oil prices. The expectation of higher interest rates by the Federal Reserve, supported by positive US economic data, increased the appeal of the dollar and led to a selloff in risk assets, including oil.
  • Overall, the bearish movement in Brent Crude Oil can be attributed to the combination of strong US economic data, the OPEC+ output policy, market outlook, and the influence of a strong dollar and surging Treasury yields.

17.10.2023 - BRENT Commodity was up 5.6%

  • The bullish movement in Brent Crude Oil today can be attributed to the following factors:
  • 1. Rebound from previous session: After experiencing a significant decline in the previous session, Brent Crude Oil saw a rebound today, with prices rising above $79 per barrel. This indicates a temporary halt to the selloff and a potential recovery in prices.
  • 2. Concerns over low demand and supply respite: Despite the rebound, Brent Crude Oil is still on track to book its fourth consecutive weekly loss. This is due to concerns over low demand and increased supply from non-core OPEC members, which have softened the impact of output cuts from Saudi Arabia and Russia.
  • 3. Decline in fuel product supplied: The latest data from the EIA shows a 7.6% decline in fuel product supplied, indicating a decrease in demand for oil. This aligns with the earlier report from the EIA, suggesting that the oil market will not be as tight as initially expected.
  • 4. Uncertain demand outlook and robust supplies: Signs of robust supplies and an uncertain demand outlook continue to weigh heavily on Brent Crude Oil prices. Large builds in US crude inventories, reduced fears of oil supply disruption from the Middle East, and reduced refining margins in China have all contributed to the bearish sentiment.
  • Overall, while Brent Crude Oil experienced a bullish movement today, the market still faces challenges such as low demand and increased supply, which have put downward pressure on prices.

07.10.2023 - BRENT Commodity was down 5.2%

  • Brent Crude Oil experienced a strong bearish movement today, with prices falling to their lowest levels in weeks.
  • The market movement can be attributed to concerns about global demand, particularly due to weaker-than-expected Chinese exports and a gloomy demand outlook.
  • The impact of supply cuts by top crude producers Saudi Arabia and Russia was overshadowed by these demand concerns.
  • Additionally, the easing of tensions in the Middle East, specifically the Israel-Hamas conflict, contributed to the bearish market movement as fears of supply disruptions subsided.
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Disclaimer
Morpher is not liable for the content of the AI investment insights. Like most GPT-powered tools, these summaries may contain AI hallucinations and inaccurate information. Morpher is not presenting you with any investment advice. All investments involve risk, and the past performance of a security, industry, sector, market, or financial product does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs. These summaries do not constitute investment advice.