Brent Oil Surges to Multi-Month Highs Amid Escalating Middle East Tensions

Brent crude oil climbed to its highest level since early May on Friday, marking a second consecutive day of sharp gains. The contract surged 2.6% on Thursday and added another 1.4% in early Friday trading.

Escalating tensions in the Middle East, particularly involving Yemen and Iran, have raised fears of a broader regional conflict. These growing threats of potential supply disruptions have driven oil prices up by nearly $5 in less than two days.

The decisive break above the key $110 resistance level—which had previously capped price attempts in mid-September and earlier this week—has generated a strong bullish signal. This breakthrough opens the path toward targets at $119.29, representing the 76.4% Fibonacci retracement of the broader 2022 to 2025 downtrend, and the psychological $120 mark, which aligns with March peaks.

Brent crude is on course for its fourth consecutive weekly gain and is poised to close above the crucial $110 pivot. This upward momentum is supported by favorable fundamentals and bullish technical indicators.

The immediate upside target lies at $115.37, which corresponds to the 138.2% Fibonacci projection of the rally from the $95.11 low. Further resistance is seen at $117.10 and $118.83, representing the 150% and 161.8% projections respectively.

However, daily technical indicators suggest the market is overbought, and profit-taking towards the end of the week could slow the bulls, leading to consolidation or a limited pullback.

The near-term bullish structure is expected to remain intact as long as prices hold above the $110 support level.

Resistance: 115.37; 117.10; 118.83; 119.70
Support: 112.72; 111.06; 110.00; 109.60

Source link