Brent's rally stalls as upside is limited by $65–$66 resistance

After advancing from January 8–14, Brent crude prices have settled into a holding pattern. The $65–$66 range, which was once supportive, has now morphed into a stubborn resistance barrier, effectively capping any upward momentum. Conversely, the $63.5 threshold stands guard, keeping the market from revisiting its December-January lows. This has created a local equilibrium, yet the overall balance of risks appears to tilt toward the downside.

Technical indicators reflect this standoff. Although the MACD has edged into positive territory for the first time since early August, its ascent has faltered on the daily chart. In the meantime, the Relative Strength Index (RSI), though not yet oversold, is wavering near 70—a sign of fading bullish conviction. Strategically, this suggests an opportunity for short entries within the $64.5–$65.5 resistance zone, with the goal of retesting $63.5. Any deeper decline would likely find a floor near the 50-day moving average and the middle Bollinger Band.

On the fundamental front, Venezuela is inching toward stability. According to Reuters, sales of crude oil that has been stockpiled since the beginning of the year have now reached nearly 8 million barrels. Even though export flows remain constrained, and PDVSA is throttling production due to logistical bottlenecks, the logjam is slowly breaking. The key variable now is whether Venezuelan heavy crude can compete on price with similar grades from Canada.

In parallel, a series of significant reforms is moving forward. The Bolivarian Republic's parliament has preliminarily approved a bill to scrap the rule requiring PDVSA to hold majority stakes in joint ventures—a major barrier to foreign investment. The reforms also include tax cut incentives and, crucially, allow disputes to be settled in international arbitration rather than in Venezuelan courts. While these changes are unlikely to unleash a sudden flood of exports in the short run, they undoubtedly lay the groundwork for sustained, long-term pressure on global oil prices.

The following strategy may come into play for your trading:

Sell Brent crude in the range of $64.5–$65.5. Profits are taken at $63.5. Stop loss is placed at $66.