Brent falls amid rising US inventories

Brent quotes have declined for the sixth consecutive trading session, with the current price at 77.88 USD. Find out more in our analysis for 23 January 2025.

Brent forecast: key trading points

• The American Petroleum Institute (API) recorded a rise of one million barrels in oil inventories over the past week
• Market pessimism is intensifying due to record-high US oil output
• Brent forecast for 23 January 2025: 76.20 and 73.80

Fundamental analysis

Brent prices declined on Thursday, approaching the 77.80 USD support level. Investors are focused on statements from US President Donald Trump and the country’s latest oil inventory data.

Market sentiment remains pessimistic due to uncertainty surrounding Trump’s first policy decisions. Despite efforts by Joe Biden Jr.’s administration to transition to renewable energy sources, US oil production remains at a record-high level.

Meanwhile, the API reported a one-million-barrel rise in crude oil inventories over the past week, marking the first increase after five consecutive weeks of declines, and adding further pressure on Brent quotes.

Brent technical analysis

Brent prices have consolidated below the lower boundary of an ascending channel, increasing the likelihood of further declines. The price has approached the crucial support level at 77.80 USD. A breakout below this level may pave the way for sellers to target 76.20 USD, with the next downside target at 73.80 USD. According to the Brent price forecast, the crossing of %K and %D lines on the Stochastic Oscillator provides an additional signal supporting a bearish scenario, indicating a stronger downward impulse.

The bearish scenario will no longer be relevant if the quotes consolidate above 79.05 USD. In this case, a breakout above the upper boundary of the descending channel may signal the resumption of an upward movement towards the potential target of 81.00 USD.

Summary

Brent quotes remain under pressure from increased US inventories and persisting uncertainty regarding Trump’s policies. The Brent price forecast shows that prices remain under pressure near the key level of 77.80 USD, and a breakout below this level will intensify the bearish momentum, with targets at 76.20 and 73.80 USD. Growth could resume if prices consolidate above 79.05 USD, paving the way for 81.00 USD.