Brent Oil outlook: Oil price rises after a brief consolidation

Brent Oil

Oil prices regained traction and rose on Friday, advancing over 1.5% during European session, after being in a quiet mode in past two days.

Double tight Doji candles on Wed/Thu signaled that traders were on hold after the latest rally and awaiting fresh signals.

Escalation of the conflict between the US and Iran has again drastically reduced flows through Hormuz Strait and raised fears of deeper crisis, particularly after Iran warned of closing the access to the Red Sea, in case the US attacks Iran’s power sites that would have a domino effect on global supply chains.

Although the oil price jumped on Friday, it still holds within the perimeter of near-term congestion, with key barrier at $87.37 (Fibo 38.2% retracement of $115.26/$70.13, where the recent advance was capped) being in focus.

Firm break here to signal bullish continuation (recovery leg from $70.13) and expose targets at $90 (psychological, reinforced by 55DMA), $92.69 (50% retracement) and $93.71 (100DMA).

Strong positive momentum on daily chart and multiple MA null-crosses (10/20; 10/200; 10/30DMA) support scenario.

Recent range floor ($83.32) offers solid support which should continue to protect the downside and keep bulls intact.

Res: 87.37; 88.00; 90.00; 91.28.
Sup: 83.32; 82.39; 80.00; 79.00.