Brent crude oil prices have plummeted over 3.5% in just two trading days, with prices dipping below $77 per barrel. This sharp decline is being attributed to a confluence of factors, primarily the easing of geopolitical tensions in the Middle East.
Israel’s recent acceptance of a proposal aimed at resolving disputes with Hamas has dampened market concerns about supply disruptions in the region, a key driver of oil price volatility. Additionally, a growing shift towards electric vehicles in China, a major oil consumer, has raised concerns about declining petrol demand, according to ANZ Bank analysts.
Technical indicators suggest that Brent crude is approaching a critical support level established in 2023. The price action exhibits bearish characteristics, including a 50% retracement of the previous downward move, false breakouts at recent highs, and large, lower-closing candlesticks, indicative of waning bullish momentum.
These technical signals, coupled with the prevailing fundamental headwinds, increase the likelihood of a sustained price decline, potentially leading to a new monthly low for Brent crude.
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