Brent crude oil price rallies as overbought conditions limit further buying near $106.97 resistance

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Brent crude oil rises 1.8% to $106.68

Highlights

Oil shipments through the Strait of Hormuz have returned to pre-conflict levels for all but Iranian barrels, increasing near-term supply.
The normalization of this key transit route reduces acute supply disruption concerns and stabilizes delivery schedules for global oil markets.
Brent trades with strong long-term bullish support, but technical indicators are mixed and suggest a 68% chance of consolidation or downside within the $103.74 to $109.62 range over the next 2 to 3 days.

Sentiment firms as Strait of Hormuz flows normalize

Brent crude oil is reacting to news that oil transit through the Strait of Hormuz has now returned to pre-conflict flow levels, with the exception of Iranian barrels, as confirmed by US Treasury Secretary Scott Bessent. The reopening of this critical waterway increases available supply and lowers immediate logistical risk for global markets, supporting positive market sentiment and stabilizing delivery expectations. According to Economictimes Indiatimes, this development reduces concerns of acute supply disruption, allowing Brent crude oil to reflect the restored trade continuity.

Mixed momentum as short-term resistance and overbought signals develop

On the technical front, XBR/USD is positioned above its MA-20 but below the MA-50 on the H1 chart, while remaining significantly above the MA-200 on the daily timeframe. The immediate resistance is marked by the Ichimoku Kijun level at $106.97. Momentum indicators currently provide mixed signals: MACD is indicating a Strong Sell, ADX points to a Buy setup, and RSI is neutral-to-negative at 49.15. Short-term oscillators including Stochastic RSI, CCI, and Bull/Bear Power suggest overbought conditions and intraday buyer dominance, while the Awesome Oscillator remains neutral and does not confirm a clear trend.

Downside favored as consolidation expected within volatile range

Over the next 2–3 days, the projected trading range for Brent crude oil is $103.74 to $109.62, reflecting typical volatility for the asset. The probability of a continued upward move is estimated at 32%, while the likelihood of a downward move is higher at 68%. The base scenario expects price consolidation between these support and resistance bands. Should the price break above the $106.97 resistance level, additional gains may follow; conversely, a fall below $103.74 would signal scope for further declines.

Anton Kharitonov, leading analyst at Traders Union, notes the Brent oil rally is supported by restored shipping flows through the Strait of Hormuz, but technical signals remain mixed and warning signs persist. He points to overbought intraday readings and a larger probability of downside within the defined range. The base case remains short-term price consolidation unless the $106.97 resistance is decisively broken. "Unless Brent secures a move above $106.97, I remain cautious and expect choppy trading with downside risks dominating."

Previously it was reported that Pakistan adjusted domestic fuel prices in response to shifts in global oil markets, highlighting the direct influence of international crude benchmarks on local costs. The current analysis adds a new dimension by focusing on Brent crude's technical setup and the restored transit flow through the Strait of Hormuz, with traders advised to monitor the $106.97 resistance level for potential near-term direction.

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.