Brent hit new multi-week high on Tuesday following fresh escalation in the Middle East which threatens to further disrupt a tiny flow through the key Strait of Hormuz supply route.
The price neared psychological $100 barrier after Houthis in Yemen, backed by Iran, attacked energy facilities in Saudi Arabia that increases risk of spreading the conflict across the region and further boosts uncertainty.
Break above last week’s three-day congestion signaled continuation of the bull-leg from $84.58 (Aug 26 higher low), part of larger rally from $78.10 (Aug 5 low) and exposed key $100 barrier, violation of which could also have strong psychological impact on markets.
Bullish daily studies contribute to favorable fundamentals, although headwinds at $100 zone should be expected, due to significance of resistance and overbought conditions on daily chart.
If current circumstances persist or deteriorate, consolidation or limited dips would be likely scenario for bulls to position for final push through $100 trigger.
Broken Fibo 76.4% barrier ($96.34) and former top at $94.81 (Aug 21) reverted to supports which should keep the downside protected.
Firm break of $100 barrier to unmask July 23 peak at 101.97.
Res: 100.00; 100.72; 101.14; 101.97
Sup: 96.34; 94.81; 92.85; 91.25
