Brent Oil price analysis: volatility ahead as oil breaks above 100-day MA

• Brent Oil prices are fluctuating due to conflicting factors.
• Potential tariffs on Russian and Iranian oil supporting prices, while trade war fears and increased OPEC+ production weigh on them.
• The market is closely watching the OPEC+ meeting on April 5th, where production plans will be reviewed.

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Brent crude prices steadied today following an impressive gain of 3% to start the week.

U.S. President Donald Trump's threats to add extra tariffs on Russian oil and take action against Iran raised concerns about oil supply, but fears of a trade war sparked worries about a slowdown in energy demand.

Oil prices are also facing downward pressure as OPEC + began unwinding production cuts by adding about 138,000 barrels per day to the group's supply. It does seem that markets are at somewhat of a stalemate as secondary tariffs on Venezuela, Iran and Russia support prices while tariff concerns weigh on prices.

This leaves Oil like many assets in a precarious position ahead of ‘liberation day’ tariff announcements and the upcoming OPEC + meeting.

The market is keeping an eye on the OPEC+ meeting on April 5, where they’ll review their plans. According to sources, OPEC+ is expected to go ahead with increasing oil production by 135,000 barrels per day in May, just like they did for April.

Looking ahead to the rest of the week and the reception toward President Trump's tariff proposals could have a huge say on where oil prices finish the week.

We also have the usual inventories data due this week with five analysts surveyed by Reuters estimating on average that U.S. crude inventories fell by about 2.1 million barrels in the week to March 28.

Let us take a look at the Cboe Crude Oil ETF Volatility IndexSM (OVX) to see how sentiment is holding up. The OVX is an estimate of the expected 30-day volatility of crude oil as priced by the United States Oil Fund (USO). Like the Cboe VIX Index®, OVX is calculated by interpolating between two time-weighted sums of option mid-quote values - in this case, options on the USO ETF.

The two sums essentially represent the expected variance of the price of crude oil up to two option expiration dates that bracket a 30-day period of time. OVX is obtained by annualizing the interpolated value, taking its square root and expressing the result in percentage points.

Looking at the OVX, it had been hovering nicely and comfortably below the 30 mark toward the backend of March despite the uncertainties in markets. A sign that market participants were weary and aware of the uncertainties and opted for a more stable approach.

There was a brief spike above 30 as last week came to a halt which could be down to the blockbuster week ahead as ‘liberation day tariffs’ are likely to add to market concerns and thus volatility as well.

This is a follow-up analysis of my prior report “Brent Oil Market Update: Tariffs, Supply Concerns, and Price Analysis” published on 27 March 2025.

From a technical analysis standpoint, Brent has broken back above the 100-day MA yesterday, finishing the day with gains of 3%.

The bullish candle also saw a change of structure on the daily timeframe as it closed above the swing high at the 73.84 handle.

A slight push higher today failed to gather any traction however, largely down to the overarching themes in play discussed above. That is without mentioning the impressive rise in Oil prices since the March 5 lows.

A pullback toward the 73.84 handle seems likely at this stage while a selloff cannot be ruled out depending on how tariffs develop tomorrow.

However, any further focus on Iran and Russian oil tariffs could negate some of the negativity via supply concerns.

A break of 73.84 brings support at 71.26 into focus before the psychological 70.00 handle becomes an area of interest.

If bulls are to seize control tomorrow, immediate resistance rests at 75.74, before the 200-day MA comes into focus at 76.46.

Brent Crude Oil Daily Chart, April 1, 2025

Support

• 74.44
• 73.84
• 71.26

Resistance

• 75.74
• 76.46
• 77.68

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