Brent Oil Forecast: Rally Targets $112.50 as Gulf Risks Rise

The main driver of the rally remains escalating geopolitical tensions in the Persian Gulf, which are increasing the risk of further supply disruptions. Attacks on commercial vessels in the Strait of Hormuz have become more frequent, with Iranian authorities reporting further incidents involving tankers attempting to cross the waterway. According to maritime tracking company Kpler, at least 18 vessels have been attacked over the past two weeks. Analysts at London Stock Exchange Group have also warned that Iran's Islamic Revolutionary Guard Corps (IRGC) could extend its operations to ships in the Gulf of Oman, potentially disrupting oil shipments that rely on ship-to-ship transfers. These developments are driving up transportation and insurance costs, adding a substantial risk premium to crude prices. According to a recent report from Goldman Sachs Group Inc., the average global tanker freight rate has exceeded $20.0 per barrel, approximately seven times its level a year earlier. Meanwhile, Yemen's Houthi movement has intensified its attacks against Saudi Arabia's energy infrastructure, claiming strikes on a Saudi Aramco facility in the port of Yanbu and production infrastructure at the Shaybah oilfield. The extent of the reported damage has not been independently confirmed, while the risk of further escalation remains elevated. The impact of regional tensions on crude prices was also discussed in our previous Brent oil forecast.

Oil prices are also receiving support from a larger-than-expected decline in US crude inventories. According to the American Petroleum Institute (API), stockpiles fell by 4.930 million barrels in the week ending October 16, compared with expectations for a decline of 1.300 million barrels. This marked the third consecutive weekly reduction in crude inventories. At the same time, China's economy, which belongs to the world's largest energy consumers and is the biggest importer of crude oil, continues to show signs of recovery. In the third quarter, gross domestic product (GDP) growth accelerated from 0.9% to 1.2% quarter-on-quarter and from 4.3% to 4.5% year-on-year. Although domestic demand remains uneven, the improvement in economic activity supports expectations of stronger energy consumption.

Overall, the fundamental backdrop continues to favour higher Brent crude prices in the medium term, although the market remains sensitive to geopolitical developments and changes in global supply conditions.

Support and resistance levels

The trading instrument remains within a medium-term upward trend, forming an ascending channel and attempting to hold above 106.25 (Murray level [+1/8]). Sustained consolidation above this mark could support further growth toward 112.50 (Murray level [+2/8], 0.0% Fibonacci retracement), 115.62 (Murray level [+2/8], H4) and 125.00 (Murray level [+2/8], W1). However, if the price breaks below 100.00 (Murray level [8/8], 23.6% Fibonacci retracement, below the middle Bollinger Band), Brent could leave the ascending channel and decline toward 91.70 (38.2% Fibonacci retracement) and 85.40 (50.0% Fibonacci retracement).

Technical indicators are providing mixed signals: the Bollinger Bands are turning upward, the MACD histogram remains stable in positive territory, while the Stochastic oscillator is moving out of the overbought zone, suggesting the possibility of a short-term correction.

Resistance levels: 106.25, 112.50, 115.62, 125.00.

Support levels: 100.00, 91.70, 85.40.

Brent Crude Oil Trading Scenarios and Price Forecast

Long positions may be opened from 108.50, with targets at 112.50, 115.62 and 125.00, and a stop-loss at 105.50. Estimated implementation period: 5–7 days.

Short positions may be opened below 100.00, with targets at 91.70 and 85.40, and a stop-loss at 103.80.