BRENT OIL extends steep rally on deteriorating geopolitical situation

Brent oil rose to the highest since early May on Friday, extending strong bullish acceleration from $110 zone into second consecutive day (the contract advanced 2.6% on Thursday and additional 1.4% on Friday morning).

Growing threats that the situation in the Middle East (Yemen and Iran) could completely run out of control if conflicts escalate, continue to fuel worries about further supply disruption that resulted of rise in oil price of nearly $5 in less than two days.

Final break above strong $110 barrier (which capped several attacks in mid-Sep and this week) generated strong bullish signal, opening way towards targets at $119.29 (Fibo 76.4% of larger $138.22/$58.00, 2022/2025 downtrend) and $120 zone (peaks of March / psychological).

Brent is on track for the fourth consecutive weekly gain and likely weekly close above $110 pivot, with increasingly supportive fundamentals contributed by bullish technical studies.

Immediate target lays at $115.37 (Fibo 138.2% projection of the upleg from $95.11), followed by $117.10 and $118.83 (150% and 161.8% projection respectively).

However, overbought daily studies and potential profit taking at the end of the week may slow bulls for consolidation / limited pullback.

Bullish near-term structure should remain intact while the price holds above $110.

Res: 115.37; 117.10; 118.83; 119.70
Sup: 112.72; 111.06; 110.00; 109.60