SINGAPORE: Brent oil may test a support at $99.64 per barrel in the third quarter.

A break could open the way towards the next support at $87.44.

A five-wave cycle from the 2020 low of $15.98 has completed at the March 2022 high of $139.13.

The cycle is subject to a deep correction. The correction consists of three waves.

Brent oil may bounce into $116.44-$117.57 range

The deep drop from the June 14 high of $125.19 confirmed the progress of a wave C.

So far, the correction has been closely observing a set of retracements on the uptrend from $35.74, instead of the trend from $15.98.

Such a relation raised a small doubt on the current wave count. Anyway, oil has broken the support at $114.73.

It is expected to seek the next support around $99.64.

Even though it is almost certain that oil could fall to $99.64, the tricky part is the subsequent move, which could be a strong bounce towards $114.73 or a deep fall towards $87.44.

The big correction could be shaped into a triangle, which is likely to prompt a bounce towards $114.73.

Alternatively, the correction could be in a zigzag mode, which leaves little room for such a strong bounce.

But as a general rule, the support at $99.64 will surely trigger a bounce again, similar to what it did after oil hit a low of $96.93 in March.

This bounce is expected to be much weaker than one from this low. A closer look at the correction on the daily chart reveals a complex wave structure.

Strong as it is, the rise from the April 11 low of $97.57 adopted a corrective wave mode.

It has been driven by a wave (B), which only managed to reverse about 61.8% of the wave A.

The wave (C) has started, which could be as fierce as the wave (A), to travel to $83.63. A weaker wave (C) could extend to $99.51.

Resistance is at $115.38, a break above which could lead to a gain into $119.12 to $125.19 range.