Brent crude price outlook: Sideways movement likely as buyer support holds above $113.58 support

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Brent crude rises 0.67% to $115.13

Highlights

Middle East tensions involving Iran and Houthi attacks have increased supply risks for Brent crude and disrupted oil infrastructure and shipping.
Geopolitical instability has raised uncertainty over regional oil output and distribution, making Brent prices more sensitive to developments in the area.
Brent crude maintains a bullish technical setup, trading near the daily high with an expected price range of $112.99 to $117.27 over the next two to three days.

Supply risks drive hedging as Mideast tensions disrupt oil flows

According to Cpa Co., renewed geopolitical concerns have heightened supply risks for Brent crude, prompting increased demand as traders seek to hedge against volatility and potential disruption. Commerzbank reports that tensions in the Middle East have escalated due to Iranian involvement and Houthi attacks, which have directly impacted oil infrastructure and shipping since October. These events have created additional uncertainty over regional output and distribution, underlining the broader sensitivity of Brent pricing to geopolitical developments.

Mixed momentum signals as Brent holds above key moving averages

On the technical side, Brent crude is holding above the MA-20 at $114.8 and MA-50 at $115.09 on the H1 chart, as well as the MA-200 at $95.17 on the daily timeframe. The Ichimoku Kijun, positioned at $113.58, acts as immediate support. MACD remains in buy territory, indicating underlying positive momentum, while ADX shows a sell signal, reflecting mixed trend strength. RSI stands at 52.96, with both Stochastic RSI and CCI also showing buy signals, suggesting a bullish but not overbought posture. Bull/Bear Power demonstrates strong buyer dominance in intraday trading, whereas the Awesome Oscillator is neutral, offering no additional bias.

Range-bound outlook prevails while volatility and breakout risks persist

Looking ahead to the next two to three trading days, the anticipated price range for XBR is $112.99 to $117.27, consistent with typical volatility seen at current levels. The base scenario favors sideways movement within this band, though a bullish breakout above $117.27 could extend the rally. Conversely, a drop below immediate support at $113.58 may open the way for a deeper correction, but this outcome is viewed as unlikely given prevailing momentum.

Anton Kharitonov, expert at Traders Union, sees Brent crude as technically supported by key moving averages and a mix of momentum indicators. He believes geopolitical tensions continue to create risk but does not yet tip the balance toward a strong trend. The analyst notes sideways action likely within $112.99 to $117.27, highlighting uncertainty for immediate direction. "Until Brent breaks out above $117.27 or falls below $113.58, I remain cautious and prefer to wait for confirmation of the next move."

Earlier, analysts noted that oil prices advanced as geopolitical tensions and supply concerns led to renewed inflationary pressures. The latest technical and fundamental signals now strengthen this view, highlighting $117.27 as the key resistance level for Brent crude, with a sustained move above this mark likely to trigger further upside in the near term.

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

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.