Brent prices started the week with a gap up, triggered by escalating tensions between the United States and Venezuela. The American Coast Guard is in active pursuit of Venezuelan oil tankers. This fact has raised market concerns about potential supply disruptions and is now pushing quotes higher.
Nevertheless, current circumstances do not alter the medium-term downtrend driven by a pessimistic Brent outlook for 2026. The crude market is under the threat of a surplus next year. A gradual recovery of OPEC+ production capacities does not favor buyers.
From a technical standpoint, a few unclosed gaps remain below the current Brent price, including the bullish one from December 16. They will ultimately send quotes down, with the nearest target being $60.85 per barrel. Coincidentally, the short- and long-term trends are now both aligned to the downside. The main risk lies in the medium-run outlook. If geopolitical tensions persist, oil prices could consolidate above $61. In the near future, investors’ focus will be on any new incidents along key maritime trade routes.
The overall recommendation is to sell Brent crude. Profits should be taken at the level of $60.85. Stop Loss could be set at $61.30.
The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
