Brent Crude Oil Price Nears Crucial Level as Trump Prepares Iran Attack

Crude oil prices extended their strong rally last week, with Brent, the global benchmark, surging toward the key resistance level of $120. West Texas Intermediate (WTI) jumped to $103.45, and the next few weeks could be pivotal as the US and Iran hold elections.

Crude Oil Price Jumps as Trump Considers Iranian Strikes

Oil prices may keep rising this month as the US midterm and Israeli general elections approach. Media reports indicate that the US is planning a major strike on Iran once the elections end, and Israel may also join the attacks.

The new round of attacks will likely be more severe than the last ones since the midterm elections will have ended. On the other hand, Iran has warned that its response to these attacks will be indiscriminate. 

Iranian officials have said that all energy infrastructure in the region will be at risk. They have also threatened to cut the internet cables that pass through the Strait of Hormuz. Their targets will also include airports, desalination plants, and other civilian infrastructure. 

Iran has also continued shooting down ships crossing through the Strait of Hormuz, a process that may escalate once the war restarts. 

All these events are happening at a time when oil prices are trading near the highest levels this year. Refined products like gasoline, diesel, and jet fuel prices are also rising at a faster pace as transport costs continue rising. Also, global oil inventories have continued to fall this month. In a recent statement, the head of Saudi Aramco warned that inventories may take two years to recover when the war ends.

Brent Crude Oil is Nearing the Crucial Level of $120

Oil price chart | Source: TradingView

On the charts, the daily chart shows that Brent has been in a steady rally in the past few months. It has jumped from $70 in January to $117.39 today. It recently jumped above the crucial resistance level of $109.62, its highest point in September. Crossing that level invalidated the forming double-top pattern.

Brent has remained above the Supertrend indicator and the 50-day Exponential Moving Average (EMA). Also, the two lines of the MACD indicator have remained above the zero line since July. 

Therefore, these technicals suggest that oil prices may continue rising, with the initial target being $120. 

Image: Shutterstock