At the moment, the fundamentals have been good for Brent Crude near term. OPEC+ has been struggling to increase supply levels, there has been a series of low inventory reports, oil demand is expected to increase as COVID restrictions are expected to lift this year. All these factors are supporting oil in the near term. However, if inflation concerns fade then we could expect oil to fall in the medium term, so the outlook is not without risk.
Let’s looks at the Brent Crude seasonality using the Seasonax screener function which automatically generates a list of the most promising investment opportunities. Firstly, choose commodities as your market. Then, set your limits from Feb 02 for the past 15 years, and the minimum and maximum time period that you want to hold the instrument ranging from 61 to 90 days. And as an optional last step, you could also select the filter that will screen your results and remove all patterns with lower rates of winning trades.
We can see that over the last 15 years, Brent Crude has risen 11 times. So, this way we can recognise some strong seasonal patterns to investigate.
Major Trade Risks
- Any large falls in inflation should cause oil to fall.
- Any specific news about oil supply levels can also impact this outlook.