Brent crude caught between trade talk uncertainty and OPEC+ supply pressures

At Friday's open, Brent crude prices hovered at $68.48 per barrel, revealing optimism from ongoing US trade negotiations with its partners. The global economic outlook and crude demand projections are being highly bolstered by potential deals. However, this growth is being hindered by an impending surge in supply from OPEC+.

The outcome of American trade talks with the EU and India will largely determine fuel dynamics through August 1. The results they yield will dictate how the market feels about global crude demand in the short run. A positive resolution, similar to the recent US-Japan agreement, could push prices toward $70–$72 per barrel. However, failed negotiations may reignite recession concerns and lower demand forecasts, thus pushing quotes down to $65–$66.

Brent is now finding modest support from Russia's upcoming gasoline export restrictions in August. Still, the measure’s impact is limited, as it excludes major Eurasian markets. Therefore, this is more of a tactical move than a structural shift, and it will only briefly affect global oil prices.

OPEC+ is also getting ready to crank up production in August, so the current bunch of bullish factors is starting to fade away. This looming supply increase could soon outweigh demand-side support, potentially easing upward price pressure.

Meanwhile, China's shift toward electrification and coal substitution is reshaping the future of crude. The strategic transition has already caused a slowdown in the country's fuel import growth and created persistent pressure on long-term oil demand projections.

Technical analysis shows the market is neutral, with no clear trend. The RSI (14) indicator hovers at 54, denoting an equilibrium between buyers and sellers with no signs of overbought or oversold conditions. This suggests that prices continue to stabilize as they prepare for an outside factor that might cause a trend to reverse or a resistance level to be overcome.

With the deadline for negotiations coming soon and OPEC+ hiking production, it is a good time to think about selling.

Suggested options for trading: 

Sell at the current price. Take profit: $66.00. Stop loss: $70.00.