General Index Brent Study

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We have updated Darling to be even more concise with more context.  In today's prompt we are asking Darling to give us an opinion on the current Brent prices using technical studies with General Index data and fundamental information from social media.

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Read on for detailed insights.

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Ask Darling

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“Do a study on the daily price of Crude Oil Dated Brent NWE FOB Original for the last 2 years. Are the current price levels bullish or bearish going forward”.

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Summary Insights

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Brent Crude at 2-year lows with bearish technical signals

• Current price of $64.19 (May 15, 2025) sits 20% below 2-year avg of $80.21 | Near 2-year low of $61.25
• Price trading below both 20-day and 50-day SMAs → classic bearish configuration
• OPEC+ production increases and 0.5M bbl/d demand forecast reduction since Jan 2025 pressuring market
• Recent U.S.-China tariff pause provided temporary relief (+2.95% WoW) but insufficient to reverse -14% YTD decline
• EIA forecasts continued weakness: $66/bbl avg for 2025, dropping to $59/bbl in 2026

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Brent Crude Oil Price Analysis (2023-2025)

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Historical Price Trends

Based on the SQL query results, I've analyzed the daily price of Crude Oil Dated Brent NWE FOB Original from May 16, 2023, to May 16, 2025. The dataset contains 507 daily price points, providing a comprehensive view of price movements over the last two years.

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Key Statistics

• Average Price (2-year period): $80.21
• Standard Deviation: $7.08 (indicating moderate volatility)
• Price Range: $61.25 (minimum on May 7, 2025) to $97.81 (maximum on September 28, 2023)
• Current Price: $64.19 (as of May 15, 2025)

This shows that current prices are significantly below the 2-year average and near the minimum observed during this period. The price has fallen by approximately 34% from its peak in September 2023.

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Technical Analysis

The Python code analysis provides valuable technical indicators:

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‍Moving Averages

• 20-day SMA (short-term): $65.29
• 50-day SMA (long-term): $68.94
• Current Price vs. SMAs: The current price ($64.19) is below both the short-term and long-term moving averages
• SMA Relationship: The short-term SMA is below the long-term SMA

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Recent Price Changes

• Day-over-Day: -$1.93 (-2.92%)
• Week-over-Week: +$1.84 (+2.95%)
• Month-over-Month: -$2.46 (-3.69%)

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The technical indicators predominantly suggest a bearish outlook. The price is trading below key moving averages, and the short-term trend (20-day SMA) is weaker than the long-term trend (50-day SMA). While there has been a slight recovery in the past week from the recent low of $61.25 on May 7, 2025, the broader technical picture remains bearish.

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Market Fundamentals

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From the external sources, several key factors are influencing current price levels:

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Bearish Factors

• OPEC+ Production Increases: In April 2025, OPEC+ members reaffirmed and accelerated their planned production increases, contributing to expectations of growing global oil inventories
• Reduced Demand Forecasts: Since January 2025, expectations for global oil demand have been reduced by approximately 0.5 million barrels per day
• Inventory Growth: An estimated 0.3 million barrels per day of oil was put into inventory during the first four months of 2025
• Price Forecast: The EIA expects Brent crude oil prices to average $66 per barrel in 2025 and fall to $59 per barrel in 2026

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Recent Bullish Developments

• U.S.-China Trade De-escalation: According to Reuters reports, the U.S. and China agreed to temporarily pause/slash tariffs and hold talks in May 2025, which sparked a rally with Brent futures climbing to $66.34 on May 12, 2025
• Supply Constraints: Several supply reductions were reported, including declining Iraqi crude exports, temporary halting of output from the Johan Castberg oilfield, easing Black Sea CPC Blend exports, and anticipated reduction in Mexican crude exports

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Current Market Sentiment

• According to Giovanni Staunovo on X, Brent Crude settled at $66.63/bbl on May 13, 2025
• Rigzone reported on May 15, 2025, that the Brent benchmark price is down more than 14% year-to-date
• Reuters reports indicate that oil prices had been in a well-defined range for much of the past 2+ years but fell out of that range in early May 2025
• Several analytical pieces carried a "Mostly Negative" sentiment indicator, reflecting underlying concerns despite any short-term price rallies

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Conclusion

The weight of evidence suggests a predominantly bearish outlook for Brent crude oil prices going forward:

1. Technical Indicators: Price below both short and long-term moving averages, with short-term MA below long-term MA
2. Price Position: Current price near 2-year lows and well below the 2-year average
3. Supply-Demand Balance: Increasing supply from OPEC+ and reduced demand forecasts
4. Market Sentiment: Despite the recent rally due to U.S.-China trade developments, the underlying sentiment remains cautious to negative

While the immediate sentiment has turned more positive due to the trade truce, the market faces considerable uncertainties. The balance of risks suggests a cautiously optimistic to neutral stance in the short term, leaning towards a more bearish outlook if potential supply increases materialize or global economic conditions worsen.