All is gloom and doom in the oil market, with bears fully seizing the initiative and Brent prices fluctuating near multi-month lows. On Friday morning, quotes hovered around the opening level, reflecting investor indecisiveness and a lack of momentum to recover.
The technical setup is another telltale sign. The price is firmly stuck below the middle Bollinger Band, signaling a downtrend. However, touching the lower band at $59.76 points to oversold conditions without the potential for an upward reversal. The Stochastic Indicator has not entered oversold territory yet, but it is now sitting below the 50 threshold, proving once again that the bears run the show. On the other hand, the Chaikin Oscillator, remaining deep down in the red zone, is hinting at a slight reprieve from selling pressure.
Fundamentals worsen the technical picture. Initially, US efforts to block Venezuelan tankers allowed Brent prices to partially recover, but the effect is limited due to the country’s small share in global stockpiles (about 1%). The market consensus of a supply glut in 2026 carries much more weight. The surplus is driven by overproduction from major players and the gradual return of OPEC+ volumes.
The growing divergence between commercial fuel stocks and their historical averages confirms a physical oversupply. Forecasts by major banks like Goldman Sachs do not bode well for prices in 2026, fostering a long-term bearish sentiment.
Given the technical signals of a possible short-term correction amid a general downtrend and weak fundamentals, the most likely scenario for the next week is a slight rebound followed by renewed pressure.
Consider the following trading strategy:
Selling Brent crude on corrective rebounds remains a key tactic. It is better to stick to the $60.90–$61.00 range. Place Take profit at $58.80 and Stop loss at $61.80.
The forecast is valid from December 19 to December 26, 2025.
This content is for informational purposes only and is not intended to be investing advice.
