BAKU, Azerbaijan, March 4. BMI, a Fitch Solutions company, has maintained its Brent crude forecast at $76 per barrel for this month, down from its previous estimate of $80 per barrel, the company told Trend.
Brent prices have trended lower in the first few weeks of Donald Trump’s presidency, with the front-month contract dropping from a year-to-date high of $82 per barrel on January 15 to below $73 per barrel at the time of writing. Despite Brent futures remaining in backwardation, term spreads have compressed, and the Brent Contract for Differences has come under downward pressure.
The market has struggled to assess the impact of Trump administration’s energy policies, with US tariff measures exerting the strongest downward pressure on prices. However, contrary to the declining prices, market sentiment has remained relatively strong. Managed money positioning has become increasingly bullish since Trump's re-election on November 5, with the ratio of long to short positions in Brent crude continuing to rise into February.
At the same time, fundamental factors have also played a role in the price decline. The Dated Brent To Frontline swap, which measures the premium of physically settled contracts over financial ones, has weakened since mid-January. However, recent data suggests a shift in sentiment, with a limited liquidation of long positions and a notable increase in short positions over the past two weeks.
Despite the volatility in Trump’s policy decisions, market swings in oil positioning and pricing have not been as dramatic as expected. This likely reflects the challenges investors face in making high-conviction calls amid the uncertain US policy environment.
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