Brent crude has tumbled through long-term support, hit by a one-two punch of tariff turmoil and surprise OPEC+ action. With global growth fears back in focus, oil’s technical breakdown couldn’t have come at a worse time for the bulls.
Tariffs, OPEC and a Return to Growth Fears
Last week was brutal for oil markets. Donald Trump’s sweeping new tariff regime – described by the White House as ‘Liberation Day’ – sent shockwaves through global markets, raising the prospect of a global economic slowdown. While the focus was on consumer goods, the ripple effect hit commodities hard. Oil was already on edge after a soft first quarter, but this was the catalyst that tipped it over.
OPEC+ didn’t help. Just hours after the tariff announcement, the producer group announced a surprise move to triple its planned increase in output for May. That decision—led by Saudi Arabia and Russia—undercut the narrative of tight supply and came as a shock to markets already contending with softening demand. The optics were poor: rising supply into slowing demand rarely ends well for prices, and oil traders responded accordingly.
Brent Crude Technical Analysis
Weekly Timeframe:
On the weekly timeframe, Brent printed a large bearish engulfing candle last week—completely wiping out the prior five weeks of price action. Volume picked up significantly too, underlining the conviction behind the move. Most importantly, price broke and closed below a key long-term support level that had held for more than two years. It’s the kind of break that shifts the landscape.
Brent Crude Weekly Candle Chart
Past performance is not a reliable indicator of future results
Daily Timeframe:
On the daily chart, the importance of anchored VWAP comes into play. Last week’s high stalled at the anchored VWAP from the January peak—a reminder that this sell-off has been brewing for a while. We can now anchor a second VWAP to last week’s high to track the average price of the sellers behind this latest leg lower. The RSI has dropped below 30 for the first time in over three years, signalling stretched conditions, but that doesn’t necessarily mean a bounce is imminent. If we do see a short-term rally, that broken support level now looks set to act as heavy resistance on the way back up.
Brent Crude Daily 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.
Tariffs, OPEC and a Return to Growth Fears
Last week was brutal for oil markets. Donald Trump’s sweeping new tariff regime – described by the White House as ‘Liberation Day’ – sent shockwaves through global markets, raising the prospect of a global economic slowdown. While the focus was on consumer goods, the ripple effect hit commodities hard. Oil was already on edge after a soft first quarter, but this was the catalyst that tipped it over.
OPEC+ didn’t help. Just hours after the tariff announcement, the producer group announced a surprise move to triple its planned increase in output for May. That decision—led by Saudi Arabia and Russia—undercut the narrative of tight supply and came as a shock to markets already contending with softening demand. The optics were poor: rising supply into slowing demand rarely ends well for prices, and oil traders responded accordingly.
Brent Crude Technical Analysis
Weekly Timeframe:
On the weekly timeframe, Brent printed a large bearish engulfing candle last week—completely wiping out the prior five weeks of price action. Volume picked up significantly too, underlining the conviction behind the move. Most importantly, price broke and closed below a key long-term support level that had held for more than two years. It’s the kind of break that shifts the landscape.
Brent Crude Weekly Candle Chart
Past performance is not a reliable indicator of future results
Daily Timeframe:
On the daily chart, the importance of anchored VWAP comes into play. Last week’s high stalled at the anchored VWAP from the January peak—a reminder that this sell-off has been brewing for a while. We can now anchor a second VWAP to last week’s high to track the average price of the sellers behind this latest leg lower. The RSI has dropped below 30 for the first time in over three years, signalling stretched conditions, but that doesn’t necessarily mean a bounce is imminent. If we do see a short-term rally, that broken support level now looks set to act as heavy resistance on the way back up.
Brent Crude Daily 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.