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Hopes for increased demand in the world’s largest oil-consuming countries, combined with supply problems from North Africa and the Middle East, are fueling bullish attacks on Brent. The ongoing political crisis in Libya is leading to a reduction in exports and production. The latter is estimated at 1.17 million bpd, approximately 1% of the global output.
Another 3-4% of global supply could be affected in the event of a direct conflict between Iran and Israel. After recent exchanges of strikes between Jerusalem and Hezbollah, the conflict seemed to subside, but U.S. intelligence does not rule out retaliation from Tehran. Israeli retaliation could target Iran’s oil infrastructure, potentially triggering a sharp increase in Brent prices.
Moreover, neither Hezbollah nor Jerusalem accepted each other’s adjustments to the U.S. plan for a ceasefire in Gaza. Geopolitical risks in the Middle East have not disappeared, and combined with the rise in global oil demand and supply issues from Libya, this contributes to rising prices.
Technically, on the daily chart, Brent is forming a 1–2–3 reversal pattern. It’s advised to hold long positions initiated from $79.30 per barrel and potentially increase them if the resistance at $82.55 is breached.
BRIGHT TRUST ACADEMY