Buying Brent in anticipation of correction to 72.25 level

Yesterday OPEC+ has decided to proceed with a planned April oil output increase. The cartel's eight member countries agreed to proceed with the production increase, which is estimated at 138,000 barrels per day. This move follows U.S. President Donald Trump renewing pressure on OPEC and Saudi Arabia to bring down prices. The increase is the first since 2022.

OPEC+ countries have cut oil production by 5.85 million barrels per day since 2022, or about 5.7% of global supply, as part of a series of measures to support the market.

In December, OPEC+ extended its latest layer of cuts through the first quarter of 2025, pushing back the plan to begin raising output to April. The extension was the latest of several delays last year.

"This gradual increase may be paused or reversed subject to market conditions," OPEC said in a statement. "This flexibility will allow the group to continue to support oil market stability."

Oil has been trading in a range of $70-$82 a barrel in recent weeks in anticipation of major changes to U.S. sanctions on large oil producers Iran, Russia and Venezuela as well as U.S. tariffs on China that could reduce demand.

Prices are also being pressured by a likely scenario in which the new U.S. administration revises the package of sanctions against the Russian oil and gas complex toward easing, which would increase the country's oil supplies.

However, President Trump's plans to cut Iran's oil exports to zero and the cancellation last week of a Chevron license to operate in Venezuela prevented prices from falling further. The combination of those bullish and bearish factors made decision-making for April extremely complex. Cartel officials added that Trump's plans for global tariffs could complicate the outlook even further.

This news put bearish pressure on oil, including Brent, pushing prices into the strong technical support at $68.0-74.0 per barrel. At the same time, an unclosed gap at the $72.25 level remained above current Brent prices. A corrective return to this level is likely to happen.

The overall recommendation is to buy Brent oil.

Profit could be taken at 72.25. A stop loss could be set at 70.0.

The volume of the opened position should be set so that the value of a possible loss, defined with a protective stop order, does not exceed 1% of your deposit.