Selling Brent crude oil down to $68 per barrel

The price of Brent oil tested the previously set target of $72 per barrel and pulled back down. The chances of another short-term bullish momentum are getting smaller as pricing fundamentals suggest a depressing outlook.

Small business uncertainty about the US economy hit the second-highest level on record since 1973. Consumer sentiment fell to a 2-year low in March, indicating an extreme decline in consumer confidence.

Trump's plans of reindustrializing the States and reshoring business are more likely to have the opposite effect, with American companies leaving the US for more business-friendly countries.

Using the automobile industry as an example, it is clear that the new tariffs could disrupt supply chains in North America. It would be costly for the US. Americans may get lower quality cars at higher prices.

Even if this new policy could boost investment in US manufacturing, it would take time, and much longer than Trump would be in office. New factories cannot be launched overnight. The process of building and launching plants to make cars, appliances, and computer chips might take decades and billions of dollars.

Under such circumstances, the companies may choose not to spend billions of dollars to move their factories to the United States, where labour costs are much higher and business conditions are worse. They might find it much easier to wait until the end of Trump's term, and then the new administration is likely to bring back free markets, improve business conditions and boost US economic growth.

The risks of a prolonged recession in the US are only growing, reducing long-term demand for oil not only in the States, but also in China, the main crude consumer, which has also been affected by the American tariffs.

In the coming 1–2 years the Brent oil price is likely to drop below $60 per barrel due to lower global demand.

The overall recommendation is to sell Brent oil from the level of $74 per barrel.

Profits should be taken at the level of 68.0. A Stop loss could be set at the level of 79.0.

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.