Brent oil price is declining on Friday. However, oil grew more than 2% at the end of the week, surpassing the level of $76 per barrel. This is the biggest weekly gain since January 10, supported by supply disruption risks and a weaker US dollar.
OPEC+ is considering postponing its planned output hike of 120,000 barrels per day. This will be the fourth postponement since 2022. At the moment, the organization is planning to resume production at 2.2 million barrels per day starting in April. Besides, oil prices are additionally supported by the uncertainty around Iraqi Kurdistan export, as well as disruptions of supply from Kazakhstan. OPEC+ is finding it increasingly difficult to maintain the production balance without disrupting market equilibrium.
An additional price growth factor was a weaker dollar, which makes oil more affordable for foreign buyers.
The market remains under pressure due to the US trade policy. The possibility of new tariffs and trade restrictions has a negative impact on the world economy and demand for oil. Meanwhile, Washington indicated that restrictive measures against Russia may both be eased and tightened, depending on the progress of negotiations to lower the tensions in Eastern Europe. These factors make the oil market unstable.
From the technical point of view, Brent oil price is forming a new uptrend on the daily timeframe (D1). A nine-month downtrend ended in early January, but the price is testing the upper boundary of this channel.
The wave structure indicates the formation of the second descending wave. However, the Moving Average of Oscillator (settings 12, 26, 9) moved to the positive zone, signalling a possible strengthening of bullish sentiment and the transition of the second wave into the third ascending wave.
Short-term prospects for Brent oil prices suggest buying with the target of 82.50. Part of the profit should be taken near the level of 79.00. A Stop loss could be set at 72.00.
Since the bullish trend is short-term, the trading volume should not exceed 2% of your total balance to reduce risks.
This content is for informational purposes only and is not intended to be investing advice.
