BRENT – Rising confidence in a peace agreement pushes prices to a three-month low

Brent crude opened sharply lower on Monday and extended losses to its weakest level in more than three months, as renewed optimism over a potential resolution to the US-Iran conflict triggered a broad risk repricing across energy markets.

The two sides announced that they had reached a preliminary agreement, with the formal signing expected next Friday.

Prospects for an end to hostilities and the reopening of the strategic Strait of Hormuz provided significant relief to markets after the three-month conflict severely disrupted global energy supplies and depleted inventories. Approximately 20 million barrels of oil per day transit through the Strait, making any improvement in regional stability a major bearish factor for crude prices.

The technical outlook on the daily chart has deteriorated further. The bearish leg that developed following repeated failures to break above the psychological $100 barrier accelerated over the past three sessions, culminating in a weekly close below the important $90/$89 support zone. This area marks a confluence of the round-number support, a former higher base, and the 50% Fibonacci retracement of the $58.70–$119.47 rally.

Strong downside momentum and the convergence of the 10-day and 100-day moving averages, which are on track to form a bearish crossover, reinforce the negative near-term outlook. However, caution is warranted as oversold stochastic readings and a declining RSI approaching oversold territory suggest that bearish momentum may begin to lose traction.

Any corrective rebounds are expected to remain limited, ideally capped below the $90 zone, which could offer more attractive levels for renewed bearish positioning.

Immediate support is located at $81.91 (61.8% Fibonacci retracement), followed by the key psychological $80.00 level. A sustained break lower would expose the 200-day moving average at $77.74, with the next downside target at $73.04 (76.4% Fibonacci retracement).

Res: 86.08; 89.09; 90.00; 91.54
Sup: 81.91; 77.74; 75.76; 73.04