Selling Brent on eased geopolitical tensions and crude oversupply

Brent crude opened at $66.34 per barrel today. The recently announced meeting of the US and Russian presidents has been a key factor influencing oil market dynamics over the past few days. The upcoming event could stabilize the geopolitical situation and mitigate risks of disrupted energy supply from the Russian Federation, putting crude prices under additional pressure. Notable, their decline was initially triggered by the OPEC+ decision to boost production made in August.

Since early August, the group’s plan to increase oil output has heightened supply concerns. Meanwhile, the market seems to be ignoring a potential drop in Russian crude exports caused by the new package of US sanctions. Traders hardly reacted to the restrictions on Indian goods imposed in response to the Asian country’s large-scale purchases of Russian oil. Hints at introducing similar measures against China also went unnoticed. Instead, after the announcement of upcoming negotiations between the US and Russia, investors began to factor the scenario of improved relations into oil prices, reinforcing the downtrend.

Demand concerns also weigh on Brent. US President Donald Trump’s import tariffs continue to weaken the global economy, reducing energy consumption. Moreover, the summer season of high fuel demand is nearing its end, further pressuring prices.

According to the technical analysis, Brent has been dropping since late July. On Thursday, the Stochastic Oscillator entered oversold territory (%K = 11, %D = 17) on the daily timeframe, being pressured by sellers and suggesting a potential upward correction. However, the On-Balance Volume (OBV) shows no confirmation as it keeps declining—implying the Stochastic signal may be false.

If US-Russia negotiations succeed and the parties reach an agreement, Brent prices might fall to $60 per barrel. In case the meeting is cancelled or talks yield no progress, a rebound toward $70 is possible. However, at present, market expectations about these negotiations remain optimistic.

The following trading strategy may be considered:

Sell at the current price. Take profit: 62.00. Stop loss: 68.50.

The forecast remains relevant between August 8 and August 15, 2025.