Trade uncertainty and excess OPEC+ supply are dragging down Brent

On Friday, Brent oil is edging higher but remains on track for a weekly decline, trading below $67 per barrel. Prices are under pressure from uncertainty over US-China trade relations and investor concerns about the impact of President Donald Trump’s tariff policies.

Conflicting reports on the progress of trade talks between Washington and Beijing are fueling global market volatility. On Thursday, Trump stated negotiations were ongoing, contradicting China’s earlier denial of discussions. The White House’s steep tariffs and retaliatory measures by trading partners have stoked fears of an economic slowdown and weaker energy demand. However, US Energy Secretary Chris Wright downplayed long-term risks, asserting that trade tensions would be temporary and emphasizing the administration’s push for higher oil production.

Meanwhile, OPEC+ is ramping up fuel production, raising concerns about potential oversupply. The group will address June crude output plans during its May 5 meeting. 

Despite prevailing bearish sentiment, Brent and WTI spreads between near and far contracts have widened, forming a bullish backwardation structure, signaling temporary tight supply conditions. Short-term volatility is expected to persist amid ongoing trade negotiations and OPEC+ policy decisions.

From a technical standpoint, the cost of Brent crude is forming an upward correction channel. Given the strength of the recent downward impulse, this consolidation pattern presents logical opportunities for building up new positions towards sales. A breakdown below the channel support could accelerate downward momentum, with the MACD (12, 26, 9) remaining below zero, confirming the prevailing bearish bias.

Signal:

Short-term prospects for Brent suggest selling. 

The target is at the level of 59.40.

Part of the profit should be taken near the level of 63.20.

A stop-loss could be placed at the level of 70.40.

The bearish scenario is short-term, so trade volume should not exceed 2% of your balance.