empty
26.02.2025 01:49 PM
Oil market on verge of collapse. Can Brent hold above $70?

This image is no longer relevant

The oil and gas market is expected to trade with high volatility in the near future. Oil remains under pressure, and its ability to stay above $70 will depend on further geopolitical developments and macroeconomic data.

Market snapshot

Brent crude oil futures have lost all their early-year momentum and are once again stuck in the consolidation range of $70 to $75, which has persisted since last fall.

As of the time of this report, the nearest futures contract was trading at $73.3 per barrel and is set to expire on Friday. The next futures contract is priced slightly lower at $72.7.

From a technical standpoint, the 4-hour chart shows oversold conditions, which could signal a potential short-term rebound. However, in the long term, oil remains weak, hovering near last year's lows.

Key bearish factors for oil market

The main driver behind oil's decline remains the anticipated supply surplus. Sanctions imposed against Russia appear unlikely to reduce global supply.

Additionally, speculation about a possible resolution to the Russia-Ukraine conflict has raised concerns over unrestricted Russian oil exports to global markets.

Further negative pressure comes from the US-China trade war, initiated by the Trump administration. The tariff restrictions have already begun to impact the economy by eroding consumer confidence and fueling inflation expectations. This, in turn, poses a risk of declining energy demand.

Why the market didn't respond to new sanctions on Iran

New restrictions on Iranian oil exports, which should have supported Brent prices, have had little notable impact on the market.

This could be due to past experiences—previous sanctions merely altered supply logistics rather than creating an actual shortage. However, the extent and severity of these new sanctions will ultimately determine their impact.

Some temporary support for oil prices came from the latest American Petroleum Institute (API) data, showing a decline in US crude oil inventories. This was the first drop in weeks, providing a brief relief from selling pressure.

Natural gas: a local upside

Natural gas futures have bounced off a short-term trendline, signaling a positive shift. However, on the 1-hour chart, the RSI indicator is showing overbought conditions, which could lead to a minor pullback before a potential new rally.

Key levels to watch

Resistance: $4.16, followed by $4.255.

Support: $3.958.

Natalya Andreeva,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

The Market Has Licked Its Wounds

The market always keeps us engaged. Despite all the gloomy talk of recession, trade wars, supply shortages, inflation, and layoffs, the S&P 500 has declined by just a little over

Marek Petkovich 09:10 2025-04-29 UTC+2

What to Pay Attention to on April 29? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic events are scheduled for Tuesday, and none are significant. If we set aside all the tertiary reports, such as the GfK Consumer Confidence Index in Germany

Paolo Greco 07:00 2025-04-29 UTC+2

GBP/USD Overview – April 29: Are Labor Market and Unemployment Data Important?

On Monday, the GBP/USD currency pair also traded with low volatility and mainly moved sideways, although the British pound maintained a slight upward bias. Despite the lack of market-relevant news

Paolo Greco 04:33 2025-04-29 UTC+2

EUR/USD Overview – April 29: The Weak Yield, the Strong Resist

On Monday, the EUR/USD currency pair remained immobilized. There were no updates over the weekend from Donald Trump regarding trade developments, and no important data or events were scheduled

Paolo Greco 04:33 2025-04-29 UTC+2

The Euro Looks for a Basis for Another Upward Surge

Business activity indices in the eurozone are declining amid heightened uncertainty. The composite index in April fell from 50.9 to 50.1, nearing contraction territory. At the same time, Germany's

Kuvat Raharjo 00:54 2025-04-29 UTC+2

The Dollar Continues to Sell Off, Outlook Remains Weak

As shown by the latest CFTC report, U.S. dollar futures indicate a further deterioration in its outlook. During the reporting week, the net short position on the USD increased

Kuvat Raharjo 00:54 2025-04-29 UTC+2

Bitcoin Can't Lose

There's never a dull moment with Bitcoin. Sometimes it behaves like a risky asset, sometimes like a safe haven. At the beginning of April, the cryptocurrency was jokingly referred

Marek Petkovich 19:03 2025-04-28 UTC+2

The Market Has Outplayed the Professionals

"Follow the smart money" — this classic principle of technical analysis suggests it's safer to side with professionals rather than the crowd. However, in 2025, such an approach would have

Marek Petkovich 19:00 2025-04-28 UTC+2

USD fails to be resilient

Is the US dollar overvalued? Bank of America thinks so. The bank points out that in previous cycles, when the USD Index peaked in the mid-1980s and early 2000s

Marek Petkovich 16:23 2025-04-28 UTC+2

ECB Ready to Cut Rates Further

Officials at the European Central Bank are preparing for further interest rate cuts, anticipating that U.S. tariff policies will inflict serious and prolonged damage on the economy, even

Jakub Novak 09:24 2025-04-28 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.