Brent crude retreats to pre-conflict levels as improving supply conditions ease market concerns
Brent crude extended its decline in early Thursday trading, falling back to levels last seen before the conflict and reaching prices not seen since February 27. Improved supply conditions, highlighted by the reopening of the Strait of Hormuz and the resumption of normal shipping flows, have significantly eased concerns over potential supply disruptions, placing renewed downward pressure on oil prices.
Market sentiment has also been supported by expectations that global supply conditions will continue to improve in the coming weeks. Additional output from Iran, following the temporary easing of US sanctions, is expected to increase crude availability, with a significant portion of those exports likely destined for China, the world’s largest oil importer and a key buyer of Iranian crude.
The latest selloff, now in its fourth consecutive day, pushed Brent below the $73.04 target, representing the 76.4% Fibonacci retracement of the $58.70–$119.47 rally. Attention is now shifting toward the psychological $70.00 support level. However, with daily indicators entering oversold territory, some traders may opt to lock in profits, potentially slowing the pace of the decline in the near term.
Technical signals remain firmly bearish. Momentum indicators continue to point lower, while multiple moving-average bearish crossovers reinforce the negative outlook. In addition, the convergence of the 10-day and 200-day moving averages suggests that a bearish “death cross” formation may be imminent, further strengthening downside risks.
A decisive break below the $70.00 threshold would expose the next downside targets at $69.15 and $66.80. On the upside, any corrective rebounds are expected to encounter strong resistance around $78.16, where the 200-day moving average is located. This level should help contain recovery attempts and protect the key resistance zone at $81.91, marked by recent highs and the broken 61.8% Fibonacci retracement level.
Res: 74.46; 75.76; 77.03; 78.16
Sup: 72.05; 70.43; 70.00; 69.15
