Brent Forecast: 1st September 2025

View: Neutral

Target Price: $67-69/bbl

• This week, we expect Brent crude to remain neutral between $67-69/bbl as prices consolidate.

• Key Drivers:
  • Macroeconomics
  • Technicals
  • Positioning

• Driver #1: Macroeconomics
  • Traders will be closely monitoring the US non-farm payrolls this Friday. This follows a troubling July jobs report, which triggered a $2 sell-off in Brent.
  • In the context of the Bureau of Labor Statistics (BLS) being replaced by Trump loyalist EJ Antoni, markets are looking for potential revisions to the June and July numbers.
  • A bearish reading would reinforce expectations for a Fed rate cut in September, supporting risk assets and weighing down on the dollar.
  • In contrast, any reading above expectations may increase the probability of the Fed leaving rates unchanged, which would further frustrate Trump.

• Driver #2: Technicals
  • Prices have been sandwiched between the $67 to $69/bbl level over the past week. Support is derived by the 100-day moving average (yellow line).
  • Volatility is declining, with the average true range (ATR) at its lowest level since May 2024. Often, periods of low volatility precede a breakout, especially in the event of a market catalyst.

• Driver #3: Positioning
  • Money managers in Brent futures were risk-on, increasing both long and short positions in the week ending 26 Aug.
  • WTI money manager shorts increased for the 8^th consecutive week. Outright short positions at 2-year highs: potential for a bullish reversal in WTI/Brent. 
  • CTAs have trimmed their shorts in Brent, with net positions rising from -15k to -8k from 25 Aug to 01 Sep.
  • Brent positioning is not saturated, so there is plenty of capacity for risk to be deployed in the event of a catalyst.  
  • WTI money manager shorts increased for the 8^th consecutive week. Outright short positions at 2-year highs: potential for a bullish reversal in WTI/Brent.