Yesterday, Donald Trump showed the markets his unpredictability, ability to bluff and change decisions quickly. The tariffs announced two days earlier on the U.S.'s closest trading partners, Canada and Mexico, were suspended for a month. Moreover, it is possible that they will never come into force. Oil quotations immediately reacted with a decline and stopped at the technical support level of $75 per barrel.
Yesterday's decision by OPEC+ to stick to its policy of gradually increasing oil production from April also contributed to the decline in oil quotations. According to the plan, the United Arab Emirates' unwinding of 2.2 million of cuts will start from April, with monthly increases of 138 000 barrels per day.
The increase will last until September 2026. Based on previous OPEC+ practice, the final decision will be made around the beginning of March.
On the other hand, fundamental support for oil was provided by the US manufacturing activity report for January published yesterday. The manufacturing PMI was 51.2, up from 49.4 last week. The ISM New Orders Index rose to 55.1 from the previous level of 52.1.
Despite the controversial fundamental factors, the current technical situation of Brent continues to point to a probable correction to the level of $79.6 per barrel.
The overall recommendation is to buy Brent oil.
Profits should be taken at the level of 79.6. A Stop-loss could be set at the level of 72.0. The volume of the opened position should be set in such a way that the value of a possible loss, fixed with the help of a protective Stop-loss order, is no more than 1% of your deposit funds.
This content is for informational purposes only and is not intended to be investing advice.
