Brent oil jumped on Monday on raising tensions in the Middle East as the US announced the start of operation to open the Strait of Hormuz while Iran claims hitting one of the US warships that attempted to enter the straight.
In the environment of rising tensions, the OPEC+ decided to raise again the output by 188.000 bpd in attempt to partially compensate growing damage to global oil supply since Iran closed strategic strait, although the decision was described by market observers as symbolic and largely to remain on the paper while Gulf supplies through Hormuz are disrupted.
The contract price jumped well above $110 mark (hit $114.27, just under last week’s recovery peak at $114.68).
Near term action is expected to be skewed to the upside as long as traffic through Hormuz remain restricted, while tough rhetoric from both sides that threatens fresh escalation adds support to oil prices
Daily studies remain in full bullish setup after dips in past three sessions were repeatedly contained by broken Fibo 61.8% level, reinforced by rising 10DMA (106.54), with price action holding above ascending and thickening daily cloud and diverging daily Tenkan/Kijun-sen, after creating a bull-cross.
Fresh advance need close above $110 to verify positive signal, with extension through recent peaks ($114.27/68) to further firm the structure for potential attack at key $120 resistance zone.
Significant support at 106.00 zone (today’s low/10DMA) should contain potential dips to keep bulls in play and guard supports at 102.63 (daily Kijun-sen) and 100.94/00 (daily cloud base/psychological.
Res: 111.37; 112.66; 113.50; 114.68.
Sup: 110.00; 107.78; 106.54; 105.64.
