Brent crude plunged by over 6% this week, breaching the critical $65–$66 support zone that had held steady for four months. This pushed prices to their lowest level since early June. Although the sustained four-day sell-off makes a local rebound possible, sellers now have their sights set on $63.
Technical indicators offer a mixed outlook. The Stochastic Oscillator, whose lines have reached oversold territory and are about to intersect, signals the potential for a minor recovery. Meanwhile, the RSI suggests that a further drop toward $63 is likely before a rebound takes place. Short sellers still control the market, and a sustained bullish reversal would require climbing back above the key resistance at $67.5 and the 100-day moving average.
The upcoming OPEC+ meeting on October 5 is in the spotlight, with media reports suggesting that member countries are deliberating a new production speed-up to regain market share. Preliminary estimates from Reuters and Bloomberg show OPEC+ output rose by 300,000–400,000 barrels per day in September. This is happening at the same time as seasonal demand is down, which means there will be a huge supply glut.
According to Bloomberg, a surplus has already materialized in the physical oil market, with 6-12 million barrels of crude remaining unsold after Middle Eastern producers finalized November supplies. Typically, these barrels are purchased at a discount by Chinese and Indian importers, but companies from these nations have shown no interest so far. Therefore, any further production increases from OPEC+ would exert even greater pressure on petroleum prices.
The following trading plan may come into play:
Sell Brent crude in the $64.5–$66 range. Take profit: $63. Stop loss: $67.5.
This content is for informational purposes only and is not intended to be investing advice.
