Brent: review
1. Current trend
At yesterday’s trading session Brent significantly rose in price, despite recent fall to the level of 105.70, which were the lows of the last four weeks. The rise was triggered by the US macro-economic statistics. According to the released data US GDP increased by 1.7% in Q2 2013, which was above analysts’ forecast, who expected the rise of only 1%. At the same time Brent has also strengthened due to technical purchases, caused by the decline in rate.
Although recently released data on oil inventories was below experts’ expectations, this fact did not put significant pressure on the Brent rate. Over the past week commercial crude oil inventories in the US increased by 400 thousand barrels, gasoline inventories rose by 800 thousand barrels, while analysts had anticipated significant decline in oil products.
Today Brent rate is supported by the data from China, the second largest oil consumer. Business activity index PMI in China rose to the level of 50.3 points against the forecast of 49.8 points. This data indicates positive dynamics in the manufacturing activity in China, thus, increasing optimism among investors, who worried about slowdown in the economic growth of China.
US macro-statistics, which is scheduled for the release today, may affect crude oil Brent rate. This will be:
15:30 (GMT+3) Number of initial applications for unemployment benefits;
17:00 (GMT+3) Business activity index in the manufacturing sector estimated by the Institute for Supply management (ISM).
2. Important levels: support and resistance
Support levels for Brent are: 107.30, 106.30 and 105.70. Resistance levels: 108.20 and 109.00.
Alexander Freis
Analyst of LiteForex Group of Companies