Brent crude oil rose to a five-week high on Monday after opening the highest gap and breaching the US$90 mark, extending last week’s 13% advance, before a quick pullback of around $5 erased all overnight gains.
Geopolitics was once again the main market driver, with growing fears of further escalation that would set the entire Middle East on fire, while subsequent comments from Iran about diplomacy based on national interests were interpreted as an opportunity for a new round of negotiations that led to lower oil prices.
The overall picture remains bullishly aligned with fundamentals representing strong uncertainty over global oil supplies (Strait of Hormuz remains closed due to recent escalation of war after a month of fragile ceasefire), while mostly bullish daily studies support the measure.
Today’s action should ideally close above the broken Fibo barrier at $87.37 (38.2% of $115.26/$70.13) to keep the immediate bulls intact, with a deeper pullback likely to find a floor above the higher base at $83.30.
A strong break at $90 exposes targets at $92.69 (50% retracement) and $93.90 (100DMA).
Accuracy: 90.00; 91.38; 92.69; 93.90
sip: 87.37; 86.27; 85.97; 83.70
