Brent oil price today: starts recovering and turns to rise

Brent oil price clearly exceeded the $72.06 mark and closed above it yesterday, initiating a recovery and moving upward on an intraday basis. The next target is $73.90; if this level is surpassed, we could see further gains potentially reaching $75.36.

Oil Prices Dropped After Israel's Limited Strikes on Iran

Oil prices experienced a significant drop at the beginning of the week after Israel's limited response to Iran's missile attack led markets to believe that a major escalation in the conflict was unlikely. Iran’s Supreme Leader, Ayatollah Ali Khamenei, further eased tensions on Sunday by indicating that there would be no direct retaliation against Israel for its strikes in Iran.

West Texas Intermediate (WTI) crude fell sharply from $71.78 on Friday to $68.01 early Sunday, although it made a slight recovery afterward. Brent crude oil futures dropped from $76.05 on Friday to below $72 before also bouncing back toward $73.

The geopolitical risk premium in oil markets surged on October 1st when Iran launched nearly 200 ballistic missiles in retaliation for the killing of Hamas leader Ismail Haniyeh by Israel in Tehran. After weeks of speculation regarding Israel's potential response, including possible strikes on Iranian oil and gas facilities, the relatively restrained nature of Saturday’s attack has helped to diffuse tensions in the region.

Brent oil bullish trend will be expected

Brent oil prices closed yesterday on a positive note, confirming a breach of the $68.65 level and setting the stage for an expected intraday rise. The initial target is $70.58, and it’s crucial to monitor price action at this level, as a breach could lead to additional gains, potentially reaching $72.15. However, if prices consolidate below $70.58, we may see a return to a bearish trend.

Conversely, a break below $68.65 would halt the anticipated bullish momentum and prompt a decline.

The expected trading range for today is between a support level of $68.00 and a resistance level of $71.00.

Analysts’ comments on Brent oil prices

“The recent geopolitical flare-ups are no longer reflected in a geopolitical premium, nor [in] the absolute level of oil price where the bearish supply/demand dynamics are dominating still,” said Sophie Huynh, senior cross-asset strategist at BNP Paribas Asset Management. “At this stage, the market is not pricing any disruption yet on the Strait of Hormuz.”

Brent crude prices have surged in recent weeks due to concerns about potential supply disruptions.

Analysts at Goldman Sachs noted last week that market attention is shifting from the Middle East conflict to the “risks of oversupply in 2025,” as OPEC members prepare to unwind voluntary production cuts this year. They pointed out that during past supply disruptions, Saudi Arabia and the United Arab Emirates accounted for approximately 80% of the shortfall within two quarters.

They concluded that the geopolitical risk premium in oil prices remains limited, as tensions between Israel and Iran have not significantly impacted oil supply from the region, and spare capacity remains high.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.