What a week it has been for the M1 Brent futures contract, which finally broke out of a long consolidation phase to sit at $69.30/bbl at the time of writing on 25 Sep. Technical traders would appreciate that the M1 Brent futures has broken out of a two-month-long triangle on the upside, which suggests further upside is here to come. So far, Brent is struggling to climb above the $69.30/bbl handle and will find it a larger challenge to break into the coveted $70/bbl handle, a feat that has not been achieved since 1 Aug. Still, a reversal from here could see support along the triangle’s boundary, at circa $66/bbl, which we’d recommend monitoring. Support may have come from an EIA-reported 0.61mb draw in crude oil inventories. Moreover, we expect shorts may have exited the contract amid fears of being stuck in an overcrowded market amid a bullish breakout, with open interest in the Brent futures complex sitting 9% above its 2020-24 max in the week ending 19 Sep. On the macro end, US Q2’25 GDP was upwardly revised to +3.8%, marking the country’s strongest performance since Q3 2023. Nevertheless, a softer labour market in recent months continues to hang over the Federal Reserve, which will likely shift focus to tomorrow’s PCE inflation reading for August. On the labour market front, although initial jobless claims fell to their lowest since July in the week ending 20 Sep, US equities remain pressured, with the S&P 500 down 0.3% today. It appears investors will remain focused on next week’s non-farm payrolls, giving a clearer idea of the Fed’s plans for the rest of the year.
