Brent price eases from new multi-week high on signals of potential diplomatic action

Brent price spiked to five-week high on Monday after gap-higher opening and break above psychological $90 barrier, in extension of last week’s 13% advance, before quick pullback of about $5 that reversed all overnight gains.

Geopolitics were again key market driver, with growing fears of further escalation that would put the whole Middle East on fire, while subsequent comments from Iran about diplomacy based on national interests, were interpreted as chance for fresh round of negotiations that deflated oil prices.

Overall picture remains bullishly aligned with fundamentals representing strong uncertainty about global oil supply (Hormuz strait remains closed due to the latest escalation of the war after a month of fragile ceasefire), while predominantly bullish daily studies underpin the action.

Today’s action should ideally close above broken Fibo barrier at $87.37 (38.2% of $115.26/$70.13) to keep immediate bulls intact, with potential deeper pullback to find ground above higher base at $83.30 zone.

Firm break of $90 to expose targets at $92.69 (50% retracement) and $93.90 (100DMA).

Res: 90.00; 91.38; 92.69; 93.90
Sup: 87.37; 86.27; 85.97; 83.70