Brent price broke its downtrend on signs of increased oil demand

On Friday, Brent crude oil prices are heading for weekly highs on signs of growing demand in the energy market. Slowing inflation in the US, a major consumer of fuel, is playing an important role. This is contributing to a rise in the cost of oil.

Energy markets were also supported by a 6.7% year-on-year increase in Chinese industrial production in April. The recovery in this sector is gaining momentum, suggesting that demand for commodities may strengthen in the future.

The recent decline in inventories of oil and oil products in the world's major trading centers has made market participants optimistic about the growth in energy consumption. Last week, the volume of fuel in US storage facilities dropped significantly.

Recent US economic data also added to optimism about global demand. Industrial production fell 0.3% last month after a downwardly revised 0.2% increase in March, the Federal Reserve reported. Productivity at US factories fell 0.5% in April from a year earlier. Manufacturing, which accounts for 10.4% of the economy, continues to be held back by higher borrowing costs.

US consumer prices rose less than expected in April, reinforcing expectations for lower interest rates. Lower interest rates could weaken the dollar, making oil cheaper for investors and boosting demand.

From a technical standpoint, Brent crude oil prices broke out of the downtrend on the H4 timeframe, indicating the formation of a new trend. Both Bulls and Bears Power indicators (standard values) are within the positive zone, confirming the upward movement.

Signal:

Short-term prospects for Brent oil suggest buying. 

The target is at the level of 89.60.

Part of the profit should be taken near the level of 85.80.

A stop-loss could be placed at the level of 79.60.

The bullish trend is short-term, so trade volume should not exceed 2% of your balance.