- Brent Crude trades above $65 per barrel, gaining over 2% in Monday’s session
- US–China 90-day tariff suspension underpins risk-on sentiment
- Market focus shifts to Tuesday’s US CPI and inventory data for further directional cues
Brent Crude Oil commenced the trading week with upward momentum, bolstered by a temporary reduction in geopolitical tensions and a generally more optimistic macroeconomic outlook.
As of the latest observation, Brent Crude is trading around $65.40 per barrel, reflecting a 2.37% increase for the day. This upward trajectory follows an agreement between the United States (US) and China to scale back and temporarily suspend certain tariffs for a 90-day period. This initiative is widely perceived as a de-escalation of trade tensions and a potential catalyst for bolstering global economic stability, providing a tailwind for risk assets.
The temporary bilateral tariff reduction is currently the primary driver of risk appetite across both commodities and equity markets. China, a significant global importer of crude oil linked to Brent pricing, is poised to benefit directly from more favorable trade conditions, thereby reinforcing positive demand expectations. The suspension of tariffs is anticipated to provide support for cross-border industrial activities and energy-intensive sectors, including manufacturing, logistics, and shipping, all of which are critical components of global oil consumption.
While this agreement is provisional and subject to potential renegotiation or reversal, its immediate effect has been to alleviate concerns regarding a potential global economic slowdown. This improvement in market sentiment has translated into widespread strength in risk-sensitive assets, including crude oil futures.
CPI data and US inventory reports to guide Brent price trajectory
The near-term direction of Brent Crude pricing now hinges on upcoming key data releases, with market participants closely monitoring indicators that could influence demand expectations and broader market sentiment.
Tuesday’s US Consumer Price Index (CPI) report is expected to play a crucial role. As a key measure of inflation, the CPI influences expectations for Federal Reserve (Fed) policy decisions. Market analysts anticipate the CPI to show a moderate increase, reflecting ongoing inflationary pressures within the US economy.
A higher-than-anticipated inflation figure may reinforce expectations for a sustained restrictive monetary policy stance by the Federal Reserve, potentially exerting downward pressure on crude oil prices by strengthening the US Dollar and dampening overall demand. Higher interest rates, implemented to combat inflation, can slow economic growth and reduce demand for commodities like oil.
Conversely, a weaker-than-expected CPI reading may provide support for commodities by bolstering risk sentiment and potentially leading to a reassessment of the Fed’s monetary policy outlook.
In addition, crude oil traders will be closely scrutinizing this week’s inventory data for indications of underlying demand strength and supply dynamics.
The American Petroleum Institute (API) is scheduled to release its weekly report on Tuesday, followed by the US Energy Information Administration (EIA) data on Wednesday. These reports provide insights into crude oil, gasoline, and distillate inventories, offering a snapshot of supply and demand trends.
While these reports primarily pertain to West Texas Intermediate (WTI) crude oil, their implications for US consumption patterns and overall market balance remain highly relevant for Brent pricing, given the interconnectedness of global oil markets.
A greater-than-anticipated decline in crude oil stockpiles would suggest tightening supply conditions and could provide further upward momentum for Brent Crude. Conversely, a surprise increase in inventories may temper recent gains by signaling potential oversupply in the market.
Brent Crude faces psychological resistance at $66
Brent Crude briefly rallied to a session high of $66.87 during early European trading hours before slightly retracing its gains.
This upward movement pushed prices above the 20-day Simple Moving Average (SMA) at $63.84 and approached—but did not surpass—the 38.2% Fibonacci retracement level of the 2025 price movement, situated at $67.21. The Fibonacci retracement levels are used to identify potential support and resistance areas.
The 50-day SMA at $67.45 also remains untested, acting as a significant technical resistance level. A sustained break above this level could signal further bullish momentum.
Brent Crude Oil daily chart
Immediate resistance is currently observed at $66.87, with stronger resistance lying between $67.20 and $67.45—a zone that combines Fibonacci and moving average levels. A confirmed breakout above this range would likely pave the way toward $69.98, which represents the 50% retracement of the year-to-date decline and closely aligns with the psychological $70.00 threshold.
On the downside, initial support is located at the 20-day SMA ($63.84), followed by more substantial support at the 61.8% long-term Fibonacci retracement level at $62.11, measured from the April 2020 low to the March 2022 high. These levels represent potential areas where buying interest could emerge and prevent further price declines.
The Relative Strength Index (RSI) on the daily chart is currently holding near 51, indicating neutral momentum with potential for further upside if key resistance levels are successfully breached. Brent Crude remains within a short-term recovery channel, although sustained gains above the 50-day SMA would be necessary to confirm a more definitive breakout.
Brent Crude Oil FAQs
Brent Crude Oil is a specific type of crude oil extracted from the North Sea, serving as a primary benchmark for international oil pricing. It is characterized as ‘light’ and ‘sweet’ due to its high API gravity and low sulfur content, which facilitates easier refining into gasoline and other valuable products. Brent Crude Oil is used as a reference price for approximately two-thirds of the world’s internationally traded oil supplies. Its widespread adoption is attributed to its consistent availability and the robust infrastructure in the North Sea region for oil production and transportation, ensuring a reliable and steady supply.
As with all assets, the fundamental drivers of Brent Crude Oil prices are supply and demand dynamics. Consequently, global economic growth can stimulate increased demand, while conversely, weak economic growth can dampen demand. Geopolitical instability, including conflicts and sanctions, can disrupt supply chains and significantly impact prices. The decisions made by OPEC (Organization of the Petroleum Exporting Countries), a consortium of major oil-producing nations, also play a crucial role in price determination. Furthermore, the value of the US Dollar influences Brent Crude Oil prices, as oil is predominantly traded in US Dollars. A weaker US Dollar can make oil more affordable for international buyers, and vice versa.
The weekly oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) exert influence on Brent Crude Oil prices. Fluctuations in inventories reflect changes in supply and demand. A reported decrease in inventories can signal increased demand, potentially driving up oil prices. Conversely, higher inventory levels can indicate increased supply, potentially pushing prices downward. The API releases its report every Tuesday, followed by the EIA’s report the subsequent day. The results from these reports typically exhibit a high degree of correlation, falling within 1% of each other approximately 75% of the time. The EIA data is generally considered more reliable due to its status as a government agency.
OPEC (Organization of the Petroleum Exporting Countries) comprises a group of oil-producing nations that collectively determine production quotas for member countries during bi-annual meetings. These decisions often have a significant impact on Brent Crude Oil prices. When OPEC decides to reduce production quotas, it can tighten supply, leading to an increase in oil prices. Conversely, when OPEC increases production, it typically has the opposite effect, putting downward pressure on prices. The term OPEC+ refers to an expanded group that includes ten additional non-OPEC members, with Russia being the most prominent among them. The coordinated actions of OPEC+ further amplify their influence on global oil markets.
