After a steady decline in recent weeks, Brent crude is currently testing a key level of support. Let's take a look at what's caused this year’s sell-off and the two scenarios that may play out at support this week following OPEC's upcoming report on Wednesday.
OPEC’s Output Shift Sparks Sell-Off
Brent crude’s sharp decline has been driven by a combination of factors, with OPEC+ announcing plans to bring back production in April, a larger-than-expected build in U.S. crude inventories, and renewed concerns over demand.
OPEC+ members Saudi Arabia, Russia, and the UAE are set to unwind a portion of their voluntary production cuts next month, adding to market fears of a supply glut. Although OPEC’s official statement suggested these additions could be paused or reversed based on market conditions, traders have responded with skepticism. The announcement triggered a fresh wave of selling, with Brent crude now down over 6% this year.
Adding to the pressure, U.S. crude stocks surged by 3.6 million barrels —well above analyst expectations—further dampening sentiment. Meanwhile, concerns over the impact of Trump’s latest round of tariffs have weighed on the demand outlook, with markets fearing a broader economic slowdown could hit energy consumption.
The result? Energy stocks have tumbled alongside crude. The Energy Select Sector SPDR Fund has slumped over the past week, with Big Oil names like Exxon Mobil, Chevron, and Occidental Petroleum all posting losses. With sentiment already fragile, OPEC’s upcoming Monthly Oil Report will be key in determining whether the market sees a reason to stabilise—or continues its downward slide.
Brent Crude: A Key Test at Support
Brent crude’s seven-week downtrend has taken prices back to a major support level at the September spike lows. Last week saw an initial bounce from this area, but the rally struggled to break through the steep descending trendline that has defined the market’s decline over the past month.
Analysing a market across multiple timeframes can provide a clearer picture of trend strength and potential reversals. On the daily chart, Brent is testing a well-established support zone. However, the hourly chart reveals two possible scenarios that traders should watch closely:
1. A Double Bottom Reversal: If last week’s swing lows hold, Brent could form a double bottom on the hourly chart. This would indicate that buyers are stepping in, potentially leading to a counter-trend rally. If price clears the descending trendline, this could confirm a short-term bullish reversal.
2. A Breakdown Below Support: If Brent decisively breaks support on elevated volume, it would signal that bearish momentum is accelerating. In this case, traders may look to short pullbacks, using previous support as resistance and targeting lower levels.
With Brent sitting at a major inflection point and OPEC’s report due midweek, volatility could pick up in the coming days. Whether this key support holds or gives way will determine the next leg of crude’s trend.
Brent Oil Daily Candle Chart
Past performance is not a reliable indicator of future results
Brent Oil Hourly Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
OPEC’s Output Shift Sparks Sell-Off
Brent crude’s sharp decline has been driven by a combination of factors, with OPEC+ announcing plans to bring back production in April, a larger-than-expected build in U.S. crude inventories, and renewed concerns over demand.
OPEC+ members Saudi Arabia, Russia, and the UAE are set to unwind a portion of their voluntary production cuts next month, adding to market fears of a supply glut. Although OPEC’s official statement suggested these additions could be paused or reversed based on market conditions, traders have responded with skepticism. The announcement triggered a fresh wave of selling, with Brent crude now down over 6% this year.
Adding to the pressure, U.S. crude stocks surged by 3.6 million barrels —well above analyst expectations—further dampening sentiment. Meanwhile, concerns over the impact of Trump’s latest round of tariffs have weighed on the demand outlook, with markets fearing a broader economic slowdown could hit energy consumption.
The result? Energy stocks have tumbled alongside crude. The Energy Select Sector SPDR Fund has slumped over the past week, with Big Oil names like Exxon Mobil, Chevron, and Occidental Petroleum all posting losses. With sentiment already fragile, OPEC’s upcoming Monthly Oil Report will be key in determining whether the market sees a reason to stabilise—or continues its downward slide.
Brent Crude: A Key Test at Support
Brent crude’s seven-week downtrend has taken prices back to a major support level at the September spike lows. Last week saw an initial bounce from this area, but the rally struggled to break through the steep descending trendline that has defined the market’s decline over the past month.
Analysing a market across multiple timeframes can provide a clearer picture of trend strength and potential reversals. On the daily chart, Brent is testing a well-established support zone. However, the hourly chart reveals two possible scenarios that traders should watch closely:
1. A Double Bottom Reversal: If last week’s swing lows hold, Brent could form a double bottom on the hourly chart. This would indicate that buyers are stepping in, potentially leading to a counter-trend rally. If price clears the descending trendline, this could confirm a short-term bullish reversal.
2. A Breakdown Below Support: If Brent decisively breaks support on elevated volume, it would signal that bearish momentum is accelerating. In this case, traders may look to short pullbacks, using previous support as resistance and targeting lower levels.
With Brent sitting at a major inflection point and OPEC’s report due midweek, volatility could pick up in the coming days. Whether this key support holds or gives way will determine the next leg of crude’s trend.
Brent Oil Daily Candle Chart
Past performance is not a reliable indicator of future results
Brent Oil Hourly Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.