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Brent Crude climbs above $65 per barrel, rising over 2% during Monday’s session.
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The 90-day US–China tariff suspension bolsters risk-on sentiment.
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Market attention turns to Tuesday’s US CPI and inventory data for further guidance.
Brent Crude Oil continued to rise at the start of the trading week, driven by easing geopolitical tensions and a more optimistic macroeconomic outlook. At the time of writing, Brent trades around $65.40 per barrel, up 2.37% on the day. This surge follows the US-China agreement to reduce and suspend certain tariffs for 90 days, seen as a step towards de-escalating trade hostilities and fostering global economic stability.
The tariff suspension has significantly bolstered risk appetite across commodities and equities, with Brent Crude benefiting from China's status as one of the world’s largest importers of Brent-linked oil. The improved trade conditions are expected to support cross-border industrial activities and fuel-intensive sectors like manufacturing, logistics, and shipping, key drivers of global oil demand.
Though the arrangement is temporary and could be subject to renegotiation, it has immediately alleviated concerns of a global economic downturn, sparking broad-based buying in risk-sensitive assets, including crude oil.
CPI Data and US Inventory Reports to Guide Brent Price Movement
- The next directional cues for Brent Crude are likely to come from key economic data, including Tuesday’s US Consumer Price Index (CPI) and weekly inventory reports.
- The CPI report is pivotal as it influences Federal Reserve policy expectations. A higher-than-expected CPI print may increase bets on a continued restrictive Fed stance, potentially strengthening the US Dollar and dampening crude demand. Conversely, a softer inflation figure may support commodities by boosting risk sentiment.
- Additionally, oil traders will closely monitor US inventory data. The American Petroleum Institute (API) will release its weekly report on Tuesday, followed by the US Energy Information Administration (EIA) data on Wednesday. Despite being focused on West Texas Intermediate (WTI), these reports significantly impact Brent pricing due to their relevance to US consumption trends and market balance.
- A larger-than-expected draw in stockpiles could signal tightening supply, providing further upward momentum for Brent. Conversely, a surprise build may weigh on prices, suggesting oversupply.
Brent Crude Technical Outlook: Resistance at $66
Brent Crude briefly touched a session high of $66.87 in early European trading before retracing slightly. The move pushed prices above the 20-day Simple Moving Average (SMA) at $63.84 but fell short of the 38.2% Fibonacci retracement level at $67.21.
The 50-day SMA at $67.45 remains untested and represents a key technical barrier. A sustained break above this level could open the door to further gains, while failure to clear $66 may prompt consolidation around current levels.
Brent Crude Oil daily chart
