Brent crude oil price saw a rebound due to the escalating tensions in the Middle East. After an attack on the Gaza hospital, oil prices surged above $93 on Wednesday. However, the price action reversed as the New York session opened. At press time, Brent crude oil was priced at $91.3 per barrel, up 0.51% for the day.
As the Israel-Hamas war rages on, Saxo Bank expects Brent Crude to surge above $90. The bank listed the ever-increasing tensions in the Middle East and the 4.4 million barrels drop in US inventories as the reason for further upside. Brent Crude oil is trading 4.9% below its yearly peak.
Just last week, the Energy Information Administration of the US reported a 4.4 million decline in its oil inventories. This number decimated the forecasted figure of a mere 300,000 barrels decline. Since the start of the war between Israel and Hamas, the Brent crude oil price of oil is up 6.5%.
As the market anticipates a supply tightening in the coming weeks, the US is expected to ask Saudi Arabia to expand its oil supply. This is because the US wants to impose strict sanctions on Iran for its support for Hamas, reducing the supply of Iranian oil in the market. The expansion of Saudi Arabia’s supply will likely cover the gap left by Iranian oil. This may stabilize the Brent oil price in the coming weeks.
Brent Crude Oil Price Prediction
Brent crude price reversed its gains during the New York session. It is entirely possible for the price to retest the $88 level for support before making another move towards the upside. However, such a move will require the ongoing supply tightening to persist.
The reversal in the New York session suggests that the oil prices are forming a local top. A breakdown below $88 will confirm a bearish outlook. In this case, the first target for the bears would be $82, where also lies the 200 MA level. For Brent crude oil price prediction to flip bullish, the price needs to overcome the $supply above $97.
Brent Oil Price Chart
