After a blistering spring rally (when prices stayed comfortably above $100 due to military tensions surrounding Iran and a brief shutdown of the Strait of Hormuz), crude has slipped into a phase of cyclical rebalancing. Big banks have been scrambling to update their targets. Goldman Sachs is currently seeing $85 by December 2026, Bank of America is betting on $95, and the US Energy Information Administration (EIA) is calling for an average of $90 per barrel in the second half of the year.
What's holding bulls back? Demand destruction, plain and simple. A September report from the International Energy Agency (IEA) warns that global oil consumption will shrink by 2.5 million barrels per day in 2026, hammered by sky-high diesel prices. OPEC has trimmed its demand growth forecasts, too.
And this is not the only headwind. Tight monetary policies of major regulators (the Federal Reserve, the European Central Bank, and the Reserve Bank of Australia) are throwing cold water on global business activity. Synchronized rate hikes are pumping up the US Dollar Index (DXY)—and a stronger greenback makes such commodities more expensive for overseas buyers, putting a dent in physical consumption.
But what's keeping a floor under prices? The EIA estimates that global crude inventories have decreased by 400 million barrels since January, and American distillate stockpiles have fallen to levels not seen since 1982. Middle Eastern producers have only partially restored exports via routes that bypass the Strait of Hormuz, and the full return of those barrels has been pushed out to 2027. Add the ongoing US–Iran negotiations to the mix, and the geopolitical risk premium stays high, keeping Brent from retreating to pre-crisis levels.
If tensions flare up and OPEC+ sits on its hands, a clean breach and hold above the long-term resistance at $104.60 could set off a momentum-driven surge into the $115–$120 range.
The ultimate recommendation is to buy Brent crude when it breaks above $104.60. Lock in profits at $115. Place Stop Loss at $100.
Calculate your open position so that a potential loss (protected by a Stop Loss order) is limited to 1% of your deposit. If your account balance does not allow you to enter a position of this size, it is better to skip the trade and wait for other market signals that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
