Brent crude price tests $109 as geopolitical tensions sustain momentum

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Brent crude steady today at $106.3

Highlights

Geopolitical tensions in the Middle East and Russia-Ukraine are causing concerns over possible Brent crude supply disruptions.
Recent conflicts maintain a supply risk premium in Brent crude, with ongoing uncertainty keeping trading activity cautious.
Brent crude trades at $106.3 with bullish short to long-term momentum and is expected to remain between $103.5 and $109.1.

Supply risk premium grows amid Middle East and Russia-Ukraine tensions

Ongoing geopolitical tensions in the Middle East and the Russia-Ukraine conflict are driving concerns about potential supply disruptions, according to Ndtvprofit. These developments add a supply-side risk premium to Brent crude as market participants evaluate the likelihood of further turbulence impacting physical deliveries. The continued uncertainty around these conflicts has maintained a cautious tone in trading, with supply conditions acting as a stabilizing factor.

Bullish momentum persists despite mixed oscillator signals and neutral trend strength

On the technical front, Brent crude trades above the H4 MA-20 at $105.86 and MA-50 at $104.05, while the daily chart shows sustained support above MA-200 at $92.99. The Ichimoku Kijun at $104.91 serves as immediate support. MACD indicates strong bullish momentum, while ADX is neutral, suggesting no dominant trend currently. RSI signals a buy, Stoch RSI is oversold, CCI is neutral, and Bull/Bear Power is overbought, reflecting buyer dominance but highlighting mild oscillator divergence. Awesome Oscillator remains neutral and does not reinforce the trend.

Range-bound consolidation likely with limited downside risk

In the coming sessions, Brent crude is expected to move within a typical volatility band from $103.5 to $109.1. The baseline scenario favors consolidation within this range. A break above the $109.1 resistance could trigger renewed bullish momentum, while a move below the $103.5 support would be needed to suggest a shift towards a bearish scenario, though the probability of decline is considered very low.

Viktoras Karapetjanc, expert at Traders Union, notes that Brent crude remains supported above key moving averages as geopolitical tensions continue to keep supply risks elevated. He believes the macro environment and current momentum favor a constructive outlook. The analyst expects price consolidation between $103.5 and $109.1 unless surprising news disrupts the balance. Karapetjanc highlights that technical signals align with a market confident but not overheated. "Further bullish momentum is likely if $109.1 is breached, but for now, consolidation around current levels looks like the most probable scenario."

Earlier, analysts noted that heightened geopolitical tensions and attacks on critical infrastructure in the Middle East had raised concerns about potential disruptions to global oil supply. With Brent crude now consolidating within a range of $103.5 to $109.1, traders should monitor for a decisive breakout above $109.1 as a signal for renewed bullish momentum in the sessions ahead.

Source of Data: XBR Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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