Yesterday’s tug-of-war between rising US oil inventories and escalating geopolitical tensions in Iran triggered sharp fluctuations in the Brent market.
Fundamental setup
More crude to store. The US Energy Information Administration’s (EIA) latest report revealed a significant weekly increase in commercial fuel stockpiles of 16 million barrels—the largest build in three years and well above analysts’ modest estimates of a 1.2–1.5 million rise. These data appear to be a heavy burden for Brent prices.
More risks to face. An imminent fall in oil quotes was capped by a high Iran-related risk premium. Unsettling news of a potential American military campaign against Tehran's nuclear facility has recently fevered the market. These concerns were fueled by Donald Trump’s fiery speech to Congress. Such an escalation could threaten steady crude deliveries through the Strait of Hormuz.
More issues to address. Elevated intraday volatility was further amplified by uncertainty surrounding the Geneva talks, where a third round of US-Iran negotiations took place. Signals of significant diplomatic progress—relayed by Oman's intermediary—initially pushed Brent prices lower. However, they rebounded following the announcement of new American restrictions. By the end of the session, quotes had barely changed, offsetting the day’s losses and gains. The opening price was almost the same as the closing one.
Technical setup
Brent crude is now sitting between two potential targets—local peaks of $70.5 and $72.0—begging to be retested. Given the underlying fundamental weakness, selling the commodity seems to be a smart move. The best entry point is above $72.0.
The overall recommendation is to sell Brent crude from $72.0. Place a Take Profit order at $70.5. Set Stop Loss at $73.0.
Always size the position so that your potential loss (protected by Stop Loss) is no more than 1% of your account balance. If you can't open a position that meets such a risk criterion, it's safer to skip this trade and wait for a better, lower-risk opportunity.
This content is for informational purposes only and is not intended to be investing advice.
