Brent crude oil price forecast: more upside as golden cross forms

Brent crude oil price continued rising this week as supply concerns remained. It rose to a high of $91.37, the highest level since November last year. It has soared by more than 29% from the lowest level in June. 

The West Texas Intermediate (WTI) has also moved into a bull market as it jumped to its highest point since November. It was trading at $87.5 on Tuesday.

The reasons for the ongoing crude oil price rally are well-known. The most recent data showed that oil demand has jumped to a record high even as many people have embraced electric cars. According to the EIA, the world is now consuming more than 100 million barrels every day.

At the same time, there are concerns about supplies. The OPEC+ cartel has decided to continue reducing daily supplies for a few more months. Therefore, the world is having to balance strong demand and tight supplies.

There is no easy way out. For one, the United States has no meaningful capacity of oil to increase since many producers are moderating their supplies. American companies are focusing mostly on shareholder returns instead of investments.

Therefore, analysts have started boosting their crude oil price forecasts. Goldman Sachs analysts believe that oil could jump to $107. Other analysts at banks like JP Morgan, Citigroup, and Morgan Stanley have sounded optimistic about oil prices.

Brent chart by TradingView

The daily chart shows that the price of Brent crude oil has been in a strong bullish trend in the past few weeks. This rally started when the price formed a strong bottom at $71.73 since March.

Brent recently moved above the important resistance level at $87.57, the highest swings on August 10th and April 13th. Most importantly, Brent has formed a golden cross pattern, which happens when the 200-day and 50-day moving averages make a crossover.

Brent has also formed what looks like an inverted head and shoulders pattern. This pattern is also a bullish sign. The Relative Strength Index (RSI) has moved to the overbought level.

Therefore, the outlook for crude oil is bullish, with the initial level to watch being $100. This price is also the highest swing in November. The stop-loss of this trade will be at $87.

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