In recent days, Brent crude prices have climbed virtually uninterrupted, edging closer to the psychologically important $110-per-barrel threshold.
The enduring stalemate around the Strait of Hormuz lies at the heart of the oil rally. Traffic through this vital global shipping route remains blocked, and talks aimed at resolving the conflict and reopening the waterway have hit a brick wall. Against this tense backdrop, the worldwide deficit of crude and refined products continues to balloon, throwing a sturdy floor under prices. Even if the confrontation cools down, any correction is likely to be shallow at best. Conversely, if tensions flare up again, quotes could quickly rocket back to their March peaks.
From a technical standpoint, the market is showing clear signs of an uptrend forming. Fuel has broken through the key resistance at $108 and still has room for further gains. Indicators also add weight to the bullish case: the MACD is firmly planted in positive territory, a reliable sign that buyers are calling the shots. Therefore, the next waypoint for oil on this journey will be the $114.50-per-barrel resistance level.
The final recommendation:
— Buy Brent crude at the current price, targeting $114.50 within one to two weeks.
— To manage downside risk in the event that the market turns against us, place a Stop Loss order just below the support zone, at around $108.
This content is for informational purposes only and is not intended to be investing advice.
