4 min read Oil prices edged higher on Wednesday on Middle East supply concerns, with traders wary of Red Sea shipping risks and threats to oil infrastructure in Saudi Arabia. The move follows a volatile Tuesday, when Brent futures touched a five month high before reversing after Iran’s president discussed mediation efforts with Pakistan’s army chief in Tehran. Hopes for a quick diplomatic breakthrough have cooled since, and tanker attacks have spread across the Gulf of Oman and near the Strait of Hormuz, beyond earlier hot spots, which keeps a risk premium in the price.
Brent holds its uptrend after a sharp shakeout
Brent is holding above its rising moving averages after Tuesday’s sharp dip into the 104.00 to 104.75 support zone was quickly bought back.
Since the pullback towards former resistance that we covered after Friday’s spike, Brent has kept building higher highs and higher lows, extending the uptrend that began near 101.00 on 12 October. The rally stalled just below 109.00 on Tuesday. The pullback that followed turned into a sharp flush, with price briefly dropping through the 104.00 to 104.75 support zone before buyers pushed it straight back above.
Price is now trading around 107.20, back above both moving averages, which are sloping higher at roughly 106.90 and 106.40. While Brent holds above them, the broader uptrend appears to remain intact.
- Bullish scenario: a move back toward Tuesday’s high near 108.50, followed by a shallow pullback that holds above the moving averages, could set up another push toward 110.00, the next major resistance on the chart.
- Bearish scenario: a break back below the moving averages could shift the focus to the 104.00 to 104.75 zone. That area capped price for most of the week of 12 October, then turned into support, and it’s where buyers stepped in during Tuesday’s flush. A close below it could put the uptrend in question.
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