Brent crude prices continue to face downside pressure as technical indicators and fundamentals hint at further downside.
Markets are digesting a host of factors at present and this is obvious from the lack of commitment we are seeing from both bulls and bears.
The U.S. announced new sanctions on Monday against individuals and companies, including the head of Iran’s national oil company. These measures target over 30 brokers, tanker operators, and shipping companies accused of helping Iran trade oil. The U.S. says this trade provides most of Iran’s government income, which is also used to support military activities in the region that Washington opposes.
The reaction however, was not what markets were expecting. A brief attempt at a push higher was quickly reigned in, leaving Oil prices trading in the red at the time of writing.
Reports suggest the U.S. pressured Iraq to restart the exports. The message was clear: resume shipping Kurdish oil through the closed pipeline or risk facing U.S. sanctions, similar to those on Iran.
Some worry this move could raise questions about Iraq’s compliance with OPEC+ production limits. However, experts believe it might just replace smuggled Kurdish oil with legal exports, without increasing overall supply.
If the latter is true then Oil prices may continue to struggle.
U.S. President Donald Trump said on Monday that tariffs on Canadian and Mexican imports will begin on March 4 as planned. This is happening even though Canada and Mexico have tried to address his concerns about border security and fentanyl. Experts believe these tariffs could harm global oil demand growth.
Inventories data will once again be key this week but i will still be focusing on tariff developments and comments from the US, Canada and Mexico.
I will also be paying attention to ongoing developments around a US led peace deal between Russia and Ukraine.
This is a follow-up analysis of my prior report “Brent Oil Price Forecast: Supply Concerns and Technical Analysis” published on 19 February 2025.
From a technical analysis standpoint, Brent has struggled of late to create any bullish momentum. Each attempt that price has made to recover has been met by selling pressure with today being no exception.
As things stand the 100-day MA is serving as significant resistance, hovering around the 75.32 handle.
The selloff late in the European session, came about as a result of U.S. consumer confidence which dropped the most in over three years this February. People are more worried about rising inflation over the next year, as they fear tariffs on imports will make household goods more expensive. This had a broad impact on market sentiment.
This reignited the US Dollars strength and thus weighed on oil prices and market sentiment in general.
Brent is now approaching a swing low from December 2024 resting at 72.39 before support at 70.18 and the psychological 70.00 handle come into focus.
A recovery from Brent is possible but may face significant selling pressure at 74.24 and of course the psychological 75.00 handle.
