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Brent Crude Oil ($BRENT) Commodity Forecast: Down 5.0% 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 major trading classification of sweet light crude oil that serves as a major benchmark price for purchases worldwide. The oil market is influenced by various factors including OPEC decisions, global supply and demand dynamics, economic indicators, and geopolitical events.

Why is Brent Crude Oil going down?

BRENT commodity is down 5.0% on Jun 4, 2024 7:55

  • 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.

BRENT Price Chart

BRENT News

Brent Extends Fall on Worries Over Higher Supply

Brent crude futures fell below $78 per barrel on Tuesday, sliding for the fifth straight session to the lowest in four months amid concerns that global supply could increase later this year. On Sunday, OPEC+ agreed to extend most of their supply cuts into 2025 but opened the door for voluntary cuts from eight member countries to be gradually unwound from October onwards. By December, more than 500,000 barrels per day is expected to re-enter the market, with a total of 1.8 million bpd returning by June 2025. Signs of economic weakness in the US, the world’s largest oil consumer, also weighed on oil prices after US manufacturing activity contracted further in May. Moreover, oil markets have been pressured recently by fears that the US Federal Reserve will not cut interest rates this year, potentially slowing economic growth and reducing oil demand.

Brent Crude Oil Drops to 4-Month Low

Brent crude oil futures fell over 2% toward $79 per barrel on Monday, the lowest in four months. This drop followed a complex deal by OPEC+ to extend output cuts, many into 2025. OPEC+ is currently reducing output by 5.86 million barrels per day (bpd), about 5.7% of global demand. They agreed to extend 3.66 million bpd of cuts due to expire this year until the end of 2025 and keep 2.2 million bpd of voluntary cuts until September, gradually phasing them out by September 2025. Gas traders found the decision somewhat disappointing, given the expected gradual unwinding of the 2.2 million bpd cuts. The move aims to support the market amid weak demand growth, high interest rates, concerns over China's demand, and rising non-OPEC production.

Brent Rises as OPEC+ Extends Supply Cuts

Brent crude futures rose above $81.5 per barrel on Monday, snapping a three-day decline after OPEC+ agreed over the weekend to extend their collective output cuts into 2025. That would include 3.66 million barrels per day of voluntary cuts that were set to expire at the end of 2024, while the group also stretched another round of cuts totaling 2.2 million bpd until the end of the third quarter of this year. Meanwhile, eight OPEC+ countries indicated plans to gradually phase out the 2.2 million bpd of additional cuts over a year from October 2024 to September 2025. Last month, oil prices lost about 6% as demand-side uncertainties weighed on the market. Oil prices have been pressured recently by fears that the US Federal Reserve will prolong high interest rates, potentially slowing economic growth and reducing oil demand.

Brent Falls for 3rd Session Ahead of OPEC+ Meeting

Brent crude futures fell by 0.3% to settle at $81.62 per barrel on Friday, down by 7.1% on the month. This drop comes ahead of the weekend OPEC+ meeting, where members are expected to extend supply cuts into 2025 and review voluntary cuts of 2.2 million barrels per day. The oil market has been pressured recently by concerns that prolonged higher borrowing costs could slow economic growth and reduce oil demand. Several Federal Reserve officials have indicated the need for more time to ensure inflation is cooling before considering rate cuts. Meanwhile, recent EIA data showed US crude inventories fell by 4.2 million barrels last week, exceeding expectations of a 1.9 million barrel draw. However, US gasoline stockpiles rose by 2 million barrels, despite forecasts for a 400,000-barrel draw, indicating weak demand ahead of the Memorial Day weekend.

Brent Hits 11-week Low

Brent decreased to a 11-week low of 80.92 USD/Bbl. Over the past 4 weeks, Brent Crude Oil lost 2.94%, and in the last 12 months, it increased 9.13%.

Brent Crude Oil Price History

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.

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.

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.

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.

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.

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.

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.
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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.