BRENT OIL – bears may take a breather above 200DMA

Brent fell over 15% in past four days, after the story about US-Iran peace agreement gained momentum, and neared levels it traded at the beginning of war.

Growing optimism that the conflict may end soon and prevent disastrous scenario for the global energy market on prolonged closure of Hormuz strait, increased pressure on oil prices (although without any detailed peace plan on the table but memorandum of understanding, signing which would open way for negotiations and standard swings in Trump’s narrative, ranging from the end of the war to fresh bombing campaigns).

Fresh drop on Tuesday (oil price was down 5% for the day) and today’s attempt to extend weakness further, were repeatedly contained by 200DMA ($77.86).

Bears are likely to take a breather here, due to significance of support and due to oversold daily studies, which generate signal for profit taking.

Bearish daily studies support scenario of limited correction – positioning for fresh push lower, additionally supported by the latest predictions of International Energy Agency about significant supply excess that oil markets are expected to face in 2027, accompanied by forecasts for disproportionally lower global demand (8 mln bpd supply vs 2 mln bpd demand).

Broken Fibo 61.8% ($81.91) marks initial resistance, followed by $85.29 (Monday’s high, posted after gap-lower weekly opening), guarding former strong supports, now acting as solid barriers at $89.00/$90.00 (broken 50% retracement of $58.70/$119.47, reinforced by falling 10DMA / psychological) where extended upticks should be capped to mark a healthy correction before larger bears regain control.

Sustained break of 200DMA to expose initial target at $73.04 (Fibo 76.4%) and unmask psychological $70 support.

Res: 81.91; 83.75; 85.29; 86.50
Sup: 77.86; 75.76; 73.04; 70.00