Brent oil falls to pre-war levels as supply normalization provides relief

Brent oil price hit pre-war levels (last traded on February 27) in early Thursday’s trading, as re-opening of Hormuz strait (20 million barrels passed through only yesterday) provides strong relief and continues to deflate oil prices.

Analysts estimate that situation is going to completely normalize in next couple of weeks, with increased production from Iran (after the US temporarily lifted sanctions) to boost oil supply, mainly to China, the world’s biggest oil importer and the biggest buyer of Iranian oil.

Fresh acceleration lower that extends into fourth straight day, cracked target at $73.04 (Fibo 76.4% of $58.70/$119.47 rally) and eyes next significant support at $70 (psychological), though oversold conditions on daily chart suggest that traders may opt for a partial profit taking.

Daily studies remain in full bearish configuration (strong negative momentum / multiple MA bear-crosses, with converging 10/200DMAs about to form death cross) maintaining downside pressure.

Violation of $70 to expose targets at $69.15 and $66.80 in extension, with upticks to face strong resistance at $78.16 (200DMA) which should cap and guard upper breakpoint at $81.91 (recent tops / broken Fibo 61.8%).

Res: 74.46; 75.76; 77.03; 78.16
Sup: 72.05; 70.43; 70.00; 69.15