Citi expects brent crude to slide towards $60 a barrel by year-end as geopolitical tensions around the Strait of Hormuz ease, Bloomberg reported.Global energy markets are gradually returning to normal as shipping through the Strait of Hormuz resumes, improving near-term crude supplies after refiners scrambled to secure alternative sources during the conflict. As supply concerns eased, oil prices tumbled, with Brent crude erasing all the gains made during the war after a 30% fall.

“Fundamentals are showing strength again,” Citigroup analysts were quoted as saying by Bloomberg.

The brokerage, however, noted that even with the shipping flows returning to normal, Chinese buyers are still missing from the market, leading to weakness in the physical crude market. Further, inventories are currently lower than expected.

Analysts at Citi said the initial return to normal market conditions could be uneven as shipping routes, insurance costs and logistics gradually stabilise.

Rising traffic and organised shipping patterns show that market participants now see the risk as manageable rather than disruptive.

“We continue to recommend selling any summer rallies and forecast Brent reaching $60 to $65 a barrel by the turn of the year,” Citi analysts said.

Other global banks have taken a similar view, Bloomberg stated.

Goldman Sachs expects the global oil market to slip back into surplus as the impact of the Iran conflict fades and shipping through the Strait of Hormuz normalises. Morgan Stanley has also lowered its oil price forecasts twice in recent weeks, warning of an emerging supply glut, the news agency added.

Oil prices edged higher on Friday as investors remained cautiously optimistic about ongoing peace efforts between the United States and Iran. Brent crude rose to $72.26 a barrel, while US crude climbed to $69.01 a barrel, Reuters reported.

Crude supply picks up pace
The reopening of the Strait of Hormuz has eased concerns over global oil supplies, with Gulf producers steadily ramping up output and exports as shipping returns to normal.

Kuwait sharply increased oil production in June, while Saudi Arabia boosted exports by sending more supertankers through the key shipping route and switching to spot pricing to speed up sales in Asia, Reuters reported.

“It’s a case of guarded optimism, with the market wanting to believe the peace efforts will hold, but it is still hedging its bets until it sees real evidence on the water,” Tim Waterer, Chief Market Analyst at KCM Trade, was quoted as saying by the news agency.

Higher crude exports from Gulf producers have increased oil supply at a time when concerns over supply disruptions are easing. According to Reuters, with more oil entering the market, expectations of excess supply have grown. As a result, the market has moved into a situation where oil prices for future delivery are higher than current spot prices.

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The article covers the following subjects:

Major Takeaways

• Main scenario: Consider long positions from corrections above 67.00 with a target of 91.80–105.17. A buy signal: the price holds above 67.00. Stop Loss: below 65.50, Take Profit: 91.80–105.17.
• Alternative scenario: Breakout and consolidation below 67.00 will allow the asset to continue declining to the levels of 62.00–58.50. A sell signal: the level of 67.00 is broken to the downside. Stop Loss: above 68.50, Take Profit: 62.00–58.50.

Main Scenario

Consider long positions from corrections above 67.00 with a target of 91.80–105.17.

Alternative Scenario

Breakout and consolidation below 67.00 will allow the asset to continue declining to the levels of 62.00–58.50.

Analysis

A descending correction appears to have formed as the second wave of larger degree (2) on the weekly chart, with wave C of (2) completed as its part. On the daily time frame, an ascending third wave (3) is likely developing. Within it, the first wave of smaller degree 1 of (3) has formed, and a downward correction has been completed as the second wave 2 of (3). On the H4 time frame, wave 3 of (3) is presumably starting to develop. If this assumption is correct, WTI will continue to rise to 91.80–105.17. The level of 67.00 is critical in this scenario as a breakout below it will enable the asset to continue declining to the levels of 62.00–58.50.

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This forecast is based on the Elliott Wave Theory. When developing trading strategies, it is essential to consider fundamental factors, as the market situation can change at any time.

Price chart of USCRUDE in real time mode

 

Copper price settles above the moving average 55 near $5.9500, to announce delaying the bearish corrective attempts, noticing its rally to settle near $6.1500 level, surrendering to the sideways track, which is represented by the current support and $6.3000 level that represents an extra barrier against the current trading.

 

The price might form sideways trading until surpassing one of the mentioned levels, note that reaching below the extra support and holding below it will open the way for activating the bearish corrective track, to expect targeting $5.8200 and $5.7100 level.

 

The expected trading range for today is between $5.9500 and $6.3000

 

Trend forecast: Sideways 

 

 

 

The EURJPY pair surrendered to the negative factors in yesterday’s trading, which are represented by the continuation of forming a strong barrier at 185.80 level besides providing negative momentum by stochastic, which forces it to form new bearish waves, to settle below the support level at 184.20.

 

Note that the attempt of forming extra barrier at 184.85 level will increase the chances of forming new bearish waves, to expect reaching 183.50 followed by the next support at 183.00, while surpassing the current barrier will provide a chances for recovering the previously achieved losses by its rally towards 185.40 and 185.80.

 

The expected trading range for today is between 183.50 and 184.60

 

Trend forecast: Bearish