Brent oil finds support at 75.5 for upward rebound

Brent oil prices wrap up January, having lost almost all the gains of the first month of 2025. The price has returned to the level of 75.5, the support of which has been keeping the oil prices in the positive zone since the beginning of the year. The two-week downtrend has pushed the technical indicators close to the oversold condition, so we may soon see a corrective rebound. The nearest target for buyers in this case will be the 77.5 level.

Financial market participants are awaiting Donald Trump's decision regarding import tariffs on goods from Canada and Mexico. Although the US president mentioned the possible exception of oil from the tariffs, it can hardly be considered as a guarantee of unchanged supplies of raw materials. Last year, Canada provided 60% of US oil imports, and such volumes are unlikely to be replaced quickly. This is especially relevant to heavy oil, the only easily available source of which, apart from Canada, is Venezuela.

According to Bloomberg experts, Trump is determined to reduce the price of oil, but this decline will not be too large. US mining companies' break-even level is now around $60 per barrel, and for sufficient profitability they need a price of $70. OPEC+ countries have approximately the same target level, so they are unlikely to comply with the US President conditions and start increasing production before April.

Meanwhile, Reuters analysts estimate an 8% reduction in Russian oil exports in February compared to January. Deliveries from the country's western ports may drop from 1.73 to 1.6 million barrels per day. The new package of restrictions on the industry has made it difficult to transport crude to foreign buyers, and the solution may be to increase the load of refineries inside the country. Thus, more petroleum products and less crude oil will be exported, supporting its prices.

The Stochastic indicator has already formed a signal to buy Brent oil, and the RSI is very close to this. The short-term bullish target could be the level of 77.5.

Consider the following trading strategy:

Buy Brent at the current price. Take profit – 77.5. Stop loss – 75.5.