- Brent Crude prices are consolidating amid US-China trade talks, US-Iran nuclear deal progress, and upcoming OPEC+ meeting.
- Technical analysis shows Brent Crude in a tight range with key support and resistance levels identified.
- OANDA client sentiment data shows a majority of traders are long on WTI, suggesting potential for a price decline.
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Brent Crude prices continue to consolidate at the start of the week as market participants grapple with a host of challenges.
Among the challenges, market participants are looking for clearer answers from the ongoing US-China trade talks, which have sent mixed signals. At the same time, the US and Iran are making progress on a nuclear deal, with plans to meet again in Europe soon. OPEC+ is set to meet on May 5 to decide on production plans for June.
Some members of OPEC+ are likely to propose increasing oil production faster for the second month in a row during their meeting on May 5. These developments have raised the issue of supply once more at a time when global markets are still trying to make sense of how proposed tariffs and trade deals may shake up demand.
Supply had been expected to increase as the Trump administration had promised to loosen regulation and pump more oil. However, looking at the rig count and the number of active oil rigs went up by two to 483 as of April 25, 2025. However, this is still 23 fewer rigs than at the same time last year.
Drilling activity has increased though for a second consecutive week. This is the first time this has happened since February. The question is however, will the rig count and drilling activity continue to rise if Oil prices remain under pressure?
Technical Analysis - Brent Crude
From a technical analysis standpoint, Brent has remained in a tight range since April 17.
Friday's daily candle closed as a hammer candlestick hinting at further upside. A small push higher in the Asian session has failed to continue after the European open.
Support is currently being tested at 66.44.
Brent Crude Oil Daily Chart, April 28, 2025
Source: TradingView (click to enlarge)
Dropping down to an H4 chart, and you can get a better sense of the indecision in oil markets at present.
Price action has seen a lower low being printed which was then followed by a higher high. For now, immediate support at 65.59 needs to hold if bulls are to push prices higher.
The first key area of resistance that needs to be broken rests at around 67.100 which could open up a retest of resistance at 68.17 and the 200-day MA at 69.13.
Brent Crude Oil Four-Hour Chart, April 28, 2025
Source: TradingView (click to enlarge)
Client Sentiment Data
Looking at OANDA client sentiment data and market participants are long on WTI with 83% of traders holding long positions. I prefer to take a contrarian view toward crowd sentiment and thus the fact that so many traders are long means WTI prices could decline further.
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