Brent crude continues to show elevated volatility amid the latest escalation in the Middle East conflict, though the baseline outlook for the coming weeks is gradually shifting toward correction and downside movement. Yesterday, prices climbed to the $89–$90 per barrel range following attacks on oil tankers and shipping disruptions through the Strait of Hormuz. Additional pressure came from threats to restrict maritime deliveries from Saudi Arabia via the Red Sea and the Bab-el-Mandeb waterway.
However, the fundamental picture is not all doom and gloom. The International Energy Agency (IEA) reported that global oil production increased by 4.1 million barrels per day in June, thanks to a temporary easing of tensions in the Persian Gulf and a partial resumption of flows through the Strait of Hormuz—the world’s key energy artery. That said, last week’s US data was rather bearish for Brent prices. Commercial crude inventories fell by only 1.7 million barrels, slightly missing market expectations. This suggests that there is no significant supply shortage, which limits the upside potential.
From a technical standpoint, the $89–$90 range remains solid resistance. Brent crude’s failure to consolidate above this zone signals waning buying pressure and fading upward momentum. This raises the likelihood of a pullback to $80 per barrel.
The final recommendation:
— Sell Brent crude at the current price of $87, targeting $80 within a couple of weeks.
— Place Stop Loss at $89 to manage risks if the market plays against us.
This content is for informational purposes only and is not intended to be investing advice.
