Bottom Line
The outlook for oil prices remains constructive but the next move will depend on supply risks and technical breakouts. The tensions in the Middle East and slow shipping through Strait of Hormuz keep the oil prices elevated. But an increase in U.S. inventories may limit the rally unless the conflict causes major supply disruption.
WTI must break above the $87-$89 resistance zone to target $100 and $105. But a break below $66 would weaken the bullish outlook. Brent shows stronger momentum and could move towards $120-$127 if it breaks above $100. Brent oil must hold the key level of $70 to keep the bullish momentum. Therefore, oil prices may continue to rise gradually but a stronger rally will require a clear breakout or serious disruption to regional oil supplies.
Read more: Iran Tensions Push Brent Toward $100
