BRENT OIL – Heightened Geopolitical Tensions Keep Prices Well Supported
Brent crude maintained a firm tone and traded near a fresh three-week high on Wednesday, as reports of a new attack on Saudi Aramco headquarters further intensified tensions in Yemen, while Iran announced new measures aimed at strengthening control over traffic through the Strait of Hormuz.
The market remains underpinned by persistent supply concerns, with oil inventories across major economies hovering near multi-year lows and reduced production struggling to keep pace with demand.
Adding to the bullish backdrop, global shortages of refined products, particularly diesel, continue to drive energy prices higher. Diesel prices have climbed to record levels in the United States and reached their highest levels in Europe since 2022. Meanwhile, a recent agreement allowing significant Russian diesel imports into the U.S. has yet to generate a meaningful easing effect, with fuel and crude prices continuing to advance.
Despite the supportive fundamentals, early warning signals are emerging on the daily chart. The 14-day momentum indicator has slipped below its midpoint, Wednesday’s Doji candle points to growing indecision despite a long lower shadow that highlights resilient buying interest, while stochastic studies have entered overbought territory.
These signals remain preliminary and require stronger downside confirmation before suggesting a more meaningful correction, keeping pullback risks limited for now.
The near-term outlook remains broadly constructive, although Brent continues to struggle at the key Fibonacci barrier of $106.31, representing the 76.4% retracement of the $109.77/$95.11 decline. A sustained break above this level would reinforce the bullish structure and expose $108.22, the September 24 lower high, ahead of a renewed challenge of the critical $110 zone.
On the downside, the rising hourly Ichimoku cloud, currently spanning $105.35 to $104.81 and tracking the four-day advance, offers initial support. Additional cushions lie at the broken 61.8% Fibonacci level of $104.17 and the ascending 10-day moving average at $103.52, which should help contain deeper dips.
Res: 107.27; 108.22; 109.40; 109.77
Sup: 104.81; 104.17; 103.52; 102.44
