Brent oil may go into a downward correction due to fundamental uncertainty

Brent crude prices held steady on Friday after a previous rise of more than 1%. Investors closely analyze the outlook for energy demand in the context of weak United States retail sales data. New signs of possible imminent easing of the Federal Reserve's monetary policy are strengthening in the market. This may have a positive impact on oil consumption in the short term.

According to the report of the U.S. Department of Commerce, retail sales in the country dropped by 0.8% in January. This was the largest decline in the indicator since last February. In addition, the January value differs from the forecasts of analysts surveyed by Reuters. They assumed a decrease in sales by only 0.1%.

On Thursday, the International Energy Agency (IEA) lowered its forecast for growth in global demand for oil this year to 1.22 million barrels per day. These indicators contradict the position of the Organization of Petroleum Exporting Countries (OPEC). It expects demand to rise by 2.25 million barrels per day.

In the nearest future, investors will continue to follow closely the Fed's interest rate outlook and the situation in the Middle East, says NS Trading President Hiroyuki Kikukawa. These two factors will play a key role in determining the level of oil consumption and its price.

Brent crude quotes have been correcting for two months. At the same time, the price has formed a stable resistance at the level of 83.55 on the H4 timeframe.

Despite the increase in positive signals for oil growth, technical characteristics suggest otherwise. Divergence of Relative Strength Index (RSI) indicator (standard values) points to a possible change in price direction towards sales within the correction corridor.

Signal:

The short-term outlook for Brent is to buy.

The target is at the level of 76.60.

Part of the profit should be fixed near the level of 80.00.

A Stop-loss should be placed at the level of 87.10.

The bearish trend has a short-term character, so the trade volume should not be more than 2% of your balance.