Brent falls amid rising US inventories

Brent quotes are declining, with sellers testing the 75.50 USD support level. Discover more in our analysis for 20 February 2025.

Brent forecast: key trading points

• According to the American Petroleum Institute, US crude oil inventories rose by 3.34 million barrels
• There are downside risks for Brent as part of the implementation of the reversal pattern
• Brent forecast for 20 February 2025: 74.35 and 73.15

Fundamental analysis

Brent prices are plunging after rising for three days. The pressure primarily comes from the American Petroleum Institute data, which recorded an increase in US crude oil reserves. According to the API estimates, the country’s oil stocks grew by 3.34 million barrels in the week ended on 14 February.

Brent quotes rose earlier, driven by reports that the G-7 countries were discussing the possibility of strengthening the mechanism to limit Russia’s oil prices. Additionally, traders are closely following the negotiations between the US and Russia on the situation in Ukraine, analysing the incoming information in search of prerequisites for easing sanctions that affect the energy sector.

Brent technical analysis

Brent prices are tumbling after breaking below the lower boundary of the Wedge pattern, which could signal the beginning of a pattern with downside targets. The Brent price forecast suggests a rebound from the 76.15 USD resistance level, with prices continuing their bearish momentum towards 73.15 USD. The decline will be confirmed if prices consolidate below the 74.35 USD support level. The Stochastic Oscillator also supports the strength of the downtrend as there was a rebound from the resistance level and the %K and %D lines crossed from top to bottom. However, the proximity to the oversold level could trigger a short-term price rise.

An alternative scenario suggests a price consolidation above 76.75 USD, indicating potential growth to 77.45 USD.

Summary

The fall in Brent prices is due to the increase in US oil inventories. The Brent analysis for today indicates that the quotes could continue to decline as part of the implementation of the Wedge pattern, with the target at 73.15 USD. However, a consolidation above 76.75 USD will invalidate the bearish scenario.