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• Brent oil prices rebounded but face headwinds from potential US tariffs and concerns about slowing US oil production.
• Market participants are closely watching global demand, potential US-Iran tensions, and the impact of trade wars on oil prices.
• Brent crude broke out of its previous range and above the descending trendline but significant resistance lies ahead.

Brent crude prices rebounded from a daily low of 73.00 to trade at 73.77 but looks likely to finish the day marginally in the red. Traders looked at shrinking crude supplies and the potential impact of new U.S. tariffs on the global economy.

Yesterday Oil prices rose 1% to its highest point since February. President Trump's announcements of tariffs on the automobile industry has ratcheted up trade war concerns.

This coupled with some concerns over supply are keeping oil prices supported for now. On Tuesday President Trump imposed new 25% tariffs on potential buyers of Venezuelan crude. The move has already led to reports that India's Reliance Industries, which runs the world's largest refining complex, will stop importing oil from Venezuela after the tariff announcement, sources said on Wednesday.

Another factor that could be adding to supply concerns comes from the US as President Trump looked to lessen the red tape to allow Oil producers to pump more oil. However, the challenges facing US oil producers are geological in nature as the country's top oilfield ages producing more water and gas, less oil, and could be close to reaching peak output.

Permian Basin Facing Challenges

The Permian Basin was the heart of the U.S. shale boom, helping the nation become the world’s largest oil producer and challenging OPEC’s market share. It now produces 6.5 million barrels per day, nearly half of the U.S. record of 13.5 million in December.

However, growth is slowing. Years of drilling in the core areas of the Permian's top sub-basins, Midland and Delaware, have depleted much of the best reserves. Companies are now moving to lower-quality areas, leading to less oil, more water, and gas output. This has raised concerns in the industry, with analysts and executives warning about the challenges of sustaining production at current levels.

For now, output is still increasing.

Shale executives predict that oil production growth in the Permian will slow by about 25% this year, adding 250,000 to 300,000 barrels per day. The government expects a bigger increase of around 350,000 barrels per day, but even that would be the smallest growth in the basin's oil production since the COVID-19 pandemic.

Source: LSEG

These developments have no doubt given market participants food for thought and could in part explain the rise in Oil prices so far this week.Tariffs and a global economic slowdown still remain the biggest threat as does a potential US-Iran confrontation which seems to be growing more likely day by day.

US Airlines have already flagged a drop in demand and if this spreads globally then demand fears will no doubt rise once more and could put pressure on Oil prices.

Technical Analysis - Brent Crude

This is a follow-up analysis of my prior report “Brent Oil Price Update: Crude Reacts to Iran Sanctions & Potential US Tariffs” published on 20 March 2025.

From a technical analysis standpoint, Brent has finally broken free from the range it was confined to between 72.39 and 70.18 since March 20.

Brent has since broken above the range and the descending trendline which was in play.

However today's daily candle is set to close as a bearish inside bar candle which could be a sign that a pullback is imminent.

Support rests at 73.00 and 72.38 before the 71.33 comes into focus.

If bulls continue their charge then immediate resistance is provided by the 200-day MA at 74.45 before the 75.00 psychological level comes into focus.

Brent Crude Oil Daily Chart, March 27, 2025

Source: TradingView

Support

73.00
72.39
71.33
70.00 (psychological level)

Resistance

74.45
75.00
76.35
79.00

We take a look at tariffs enacted so far, what is expected to come into effect on April 2^nd and what could be on the menu next. We provide an overview of the expected direct impact on US GDP without retaliation or sentiment effects.

While tariffs on individual countries or product groups have usually only limited effect on a macro level, small changes add up.

Fully enacting the expected tariffs on China, Canada, Mexico, cars & car parts as well as steel & aluminum could lift the effective average tariff rate above 13% and weigh on US GDP by 0.5%.

The reciprocal measures remain the most difficult to predict. We cannot rule out first EU-specific tariff announcements already next week.

Full report in PDF.

Gold returned to growth this week, re-entering the territory of historical highs after a brief correction at the end of last week. The reason for the new growth momentum is new bouts of tariff wars, which intensifies the pull to safe havens on the part of Central Banks. They continue to buy gold instead of US Treasury bonds.

The current growth is a logical development of the technical picture, which we have described many times before. Its logical development will be a growth to the area of $3180 in the perspective of a couple of weeks and a rise towards $3400 by the end of summer.

Silver also shone, climbing to levels above $34 per troy ounce. The last time we briefly saw such a price was last October. Before that, it wasn’t since 2012. Even then, it was a pivotal area. The bulls are clearly looking at the current situation with some trepidation. A foothold at this level or higher would take the upside potential to $50 an ounce, which is almost half the price of current levels. Compare that to gold’s 11% appreciation potential.

USDJPY is establishing above 150 support as fresh gains extend into second consecutive day and fully reverse Tuesday’s 0.7% drop.

Bulls cracked 151.00 level on Thursday and pressure pivotal barriers at 151.25/30 (Fibo 38.2% of 150.87/146.53/March high).

Headwinds could be expected at this zone, which would pause recovery from 146.53 (March 11 low), although dips are likely to be limited and provide better levels for fresh longs.

Broken 150 level reverted to support which should hold extended dips and keep near term focus at the upside.

Violation of 151.25/30 and nearby 200DMA (151.66) to generate strong bullish signal for continuation of recovery leg from 146.53 towards 152.70 (50% retracement).

Res: 151.00; 151.25; 151.30; 151.66.
Sup: 150.25; 150.00; 149.50; 149.07.

Markets

This week’s volatile and often erratic trading pattern continued today. European markets obviously started in a bad mood as US President Trump pushed through (the partly anticipated) 25% tariffs on the car sector after European close. Key European indices started with losses of around 1.5%, but avoided a steeper drop with the unknown known finally morphing into a known known and at least providing the advantage of clarity. EUR/USD dipped since yesterday’s tariff pre-lude from the 1.0795 area to 1.0740 in Asian trading, only to be back at start as we finish this report. The German Bund opened strong, but rapidly turned south in lockstep with UK Gilts and US Treasuries. UK Chancellor Reeves tried to defend her Spring budget, but the focus on future payback effects from structural reforms isn’t the one markets currently want to see. Stressing that it’s okayed by the UK Office for Budget Responsibility (OBR) isn’t the best sales argument given the OBR’s track record of painting a too rosy economic picture. It means either more economic pain in the Autumn update (tax hikes, spending cuts) or choosing for the “easy” way by giving up fiscal rules. Today’s Gilt sell-off suggests markets take the second route more and more into account. The UK 10-yr yield touched 4.8% for only the second time since 2008 following a brief period higher in January. US Treasuries followed the move south with tonight’s long-term budget outlook (2025-2055) from the Congressional Budget Office in mind. The US 10-yr yield tested first technical resistance at 4.4%, but a break higher in yields was blocked for now. A marginal downward revision to the Q4 PCE deflator (2.6% Q/Q from 2.7%) and continuously low weekly jobless claims (224k) might have marginally helped. Souring risk sentiment going as US dealings kicked off, played a role as well in balancing (long term) core bond losses from an intraday perspective. The front end of core bond curves outperformed, especially in Europe. ECB comments were mixed with Wunsch suggesting that a pause for April should at least be on the table given upside inflation risks. ECB Kazaks argues in favour of a gradual reduction in rates in the future if the ECB’s baseline scenario holds. However, geopolitical uncertainty is so high that it makes a difficult navigating. ECB vice-governor De Guindos leaves it out in the open for April, balancing all risks. Our base scenario is final 25 bps rate cut followed by a long pause.

News & Views

The Norges Bank (NB) today left its policy rate unchanged at 4.5%. In the respect, the NB ‘backtracked’ on guidance at the January 22 meeting that “the policy rate will likely be reduced in March”. Inflation picked up in recent months and has been markedly higher than expected (1.4% M/M and 3.6% Y/Y, core 1.0% M/M and 3.4% Y/Y in February). Wage growth in 2024 also turned out higher than projected. This could lead to higher inflation ahead than previously projected. Economic activity fell towards the end of last year and was lower than expected, but Norges Bank’s Regional Network Contacts reported increased activity over winter. In this context, the NB judges that a restrictive monetary policy is still needed to bring inflation down to target within a reasonable time horizon. The NB upwardly revised its expectations for the CPI-ATE for 2025 to 3.4% (from 2.7%) and to 2.9% from 2.7% for 2026, but still expects inflation to return to 2.1% in 2028. At the same time, the NB is aware that an overly tight policy could restrict the economy more than needed. Trade-offs make the MPC conclude that the current stance is warranted for somewhat longer than previously signaled. The new NB forecast is consistent with a decline in the policy rate to 4% by the end of the year (September & December rate cuts), followed by a very gradual further decline over the next years towards 3% by 2028. The krone briefly declined to EUR/NOK 11.39 at the time of the decision but currently trades little changed near EUR/NOK 11.34.

The Hungarian government announced additional requirements for investment funds today. From October, they must hold at least 3% of their assets in short-term government debt. There’s already a rule in place, obliging them to hold 5% in government bonds. Those minimum requirements increase to 4% and 6% respectively from April 2026 while those levels rise to 5% and 10% for bond funds. Hungarian bonds rallied after the announcement with the 10-yr government bond yield currently shedding up to 10 bps.

The British pound is higher on Thursday. In the European session, GBP/USD is trading at 1.2924, up 0.50% on the day.

UK retail sales expected lower for February

The UK releases the February retail sales report on Friday, with the markets bracing for a decline of 0.3% m/m. Retail sales soared 1.7% in January, crushing expectations and hitting the highest level since May 2024. Annualized, retail sales are expected to ease to 0.5%, down from 1% in January.

The Confederation of British Industry (CBI) reported a sharp drop in sales volumes in March, as the retail sales index fell to -41, down from -23 in February. This was the lowest reading since July 2024.

The CBI reported that retailers blamed the soft report on global trade tensions and the autumn budget have dampened consumer and business confidence, leading to reduced demand.

Businesses will see an increase in employers' taxes next month, which could lead to significant job losses, which in turn will hurt consumer spending.

The UK will also release final GDP data for the fourth quarter. The initial estimate showed that the economy expanded 0.1% after no growth in Q3. Annualized, the initial estimate came in at 1.4%, up from 1.0% in Q3. The final estimates are expected to confirm the initial readings, which would indicate that the UK economy continues to struggle.

US GDP ticks higher to 2.4%

In the US, Final GDP (3rd estimate) for the fourth quarter came in at 2.4% y/y, slightly higher unchanged than the 2.3% gain in the previous two estimates. This was down sharply from the 3.1% in Q3. The Federal Reserve is carefully monitoring the economy's slow decline and has signaled it will lower rates twice during the year.

GBP/USD Technical

• GBP/USD is testing resistance at 1.2940, followed by resistance at 1.2991
• 1.2864 and 1.2813 are the next support levels

Daily Pivots: (S1) 149.33; (P) 150.14; (R1) 150.72; More...

Intraday bias in USD/JPY remains neutral for the moment. Strong resistance is still expected from 150.92 to complete the corrective recovery from 146.52. On the downside break of 148.17 support will bring retest of 146.52 first. Sustained trading below 61.8% retracement of 139.57 to 158.86 at 146.32 will resume the fall from 158.86 to 139.57 support. However, firm break of 150.92 will argue that fall from 158.86 has completed and turn bias back to the upside for 154.79 resistance next.

In the bigger picture, price actions from 161.94 are seen as a corrective pattern to rise from 102.58 (2021 low), with fall from 158.86 as the third leg. Strong support should be seen from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound. However, sustained break of 139.26 would open up deeper medium term decline to 61.8% retracement at 125.25.

Daily Pivots: (S1) 0.8818; (P) 0.8834; (R1) 0.8855; More…

USD/CHF is still staying in consolidation above 0.8757 and intraday bias remains neutral. In case of stronger recovery, upside should be limited by 0.8911 support turned resistance. On the downside, break of 0.8757 will resume the fall from 0.9200 to 61.8% retracement of 0.8374 to 0.9200 at 0.8690. Sustained break there will pave the way back to 0.8374 support.

In the bigger picture, rejection by 0.9223 key resistance keep medium term outlook bearish. That is, larger fall from 1.0342 (2017 high) is not completed yet. Firm break of 0.8332 (2023 low) will confirm down trend resumption.

Daily Pivots: (S1) 1.0729; (P) 1.0767; (R1) 1.0789; More...

Intraday bias in EUR/USD is turned neutral with current recovery. Outlook is unchanged that strong support is expected from 38.2% retracement of 1.0358 to 1.0953 at 1.0726 to completion the correction from 1.0953. On the upside, break of 1.0857 will bring retest of 1.0953 first. Firm break there will resume larger rise from 1.0176. However, sustained break of 1.0726 will bring deeper correction to 55 D EMA (now at 1.0630).

In the bigger picture, prior strong break of 55 W EMA (now at 1.0675) suggests that fall from 1.1274 (2024 high) has completed as a three wave correction to 1.0176. Rise from 0.9534 is still intact, and might be ready to resume. Decisive break of 1.1274 will target 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. Also, that will send EUR/USD through a multi-decade channel resistance will carries larger bullish implication. This will now be the favored case as long as 1.0531 resistance turned support holds.