Brent crude has rebounded from support near $70.50 and pushed into the mid-$80s, topping $85 a barrel for the first time in a month as renewed Middle East tensions add a geopolitical risk premium to energy markets. Momentum signals have turned higher, but the rebound now needs to hold above the former $82.50 resistance to keep the setup intact.
Brent crude rose above $85 a barrel on Tuesday, its highest level in a month, after escalating tensions in the Middle East raised concerns over disruptions to global oil supplies. The move follows a sharp bounce off support: Brent had recently fallen back towards the area around $70 per barrel, filling a gap open since 2 March, before that zone held and the market turned higher.
Middle East tensions drive the rally
The gains were driven by growing supply worries after renewed tensions in the Middle East, particularly around the Strait of Hormuz, a key maritime route for global energy exports. The waterway handles around 20 percent of the world's seaborne oil trade, so any threat to shipping through it weighs heavily on markets. Market participants also cited expectations of a decline in U.S. crude inventories as further support for prices.
The rally rippled through energy equities. Woodside Energy Group, Australia's largest independent oil and gas company, gained 3.31% to A$30.29 as the S&P/ASX 200 Energy Index rose 2.30%. Rising Brent prices directly improve Woodside's LNG pricing outcomes because many of its LNG contracts are indexed to oil.
The technical picture has improved
Momentum has strengthened alongside the price move. Brent has climbed back above its 20-day moving average, while the relative strength index has broken above the downtrend that formed after the market reached oversold territory, below 30, from late June into early July. The 10-day moving average is also close to crossing above the 20-day, a signal that would point to firmer short-term momentum.
But the rebound still faces its first real test. The area around $82.50, where prices consolidated between 16 and 22 June, has become a key reference point; holding above it would shift attention towards the next resistance zone near $85.50 and the 50-day moving average. Below the rebound, the support around $70.50 remains the level to watch, and a decisive break there would signal the recovery had failed.
Analysts said oil prices are likely to remain volatile as investors track geopolitical developments and their potential impact on supply.
Sources: CMC Markets, İLKHA, Kalkine
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