De-escalated geopolitical tensions send Brent prices into correction

Brent prices found their footing at $63.73 per barrel during today’s morning session following a recent slump. The plunge was primarily driven by a sharp drop in the geopolitical risk premium. US President Donald Trump’s statements regarding de-escalating tensions in Iran eased market concerns over a potential disruption to crude supplies, triggering significant profit-taking after a seven-day rally.

Earlier this week, oil prices jumped to multi-month highs on fears of severe logistics failures. But as these troubles are over, the surplus issue is all traders can think about. Data from the US Department of Energy revealed a surprising increase in commercial crude and gasoline stocks, exerting additional pressure on quotes. At the same time, there are reports that Venezuela’s output is returning to the global market.

In the meantime, Russian oil imports to India—its  largest consumer—fell to the lowest level in two years last month amid a tighter sanction regime. These restrictions forced the Asian country to search for legal alternatives, including OPEC nations. This fact provides structural support for Brent crude and prevents quotes from diving deeper.

The technical picture is currently showing a wobbling uptrend and a potential downward reversal following strong spikes in the week from January 8 to January 14. Yesterday’s red candlestick and today’s bearish dynamic during early trading confirm this view. The Stochastic Oscillator (5, 3, 3), with its %K line at 58 and the %D one at 70, is now exiting overbought territory, thereby signaling a correction in play. The Chaikin Oscillator, despite still being positive, is declining from the peak it reached on January 14, suggesting that bulls are losing their grip on the market. This aligns with the broader picture of an imminent correction.

Pay attention to the trading plan down below:

Sell Brent crude at the current price, with Take profit at $62.60 and Stop loss at $65.20.

This forecast is valid from January 16 till January 23, 2026.