Despite recent gains, oil markets are caught between technical resistance levels and divergent forecasts, with potential for significant moves depending on geopolitical and supply developments.
Oil extended its recent climb last week, with Brent crude on the ICE finishing at $88.50 a barrel and domestic crude futures at ₹7,810 a barrel, according to The Hindu BusinessLine. Both contracts rose more than 5% over the week, but the advance ran into clear technical resistance.
In Brent, the move above $86 early in the week opened the door to further gains, yet the market stalled near $91, where sellers appeared to step in. BusinessLine said the chart now points to a likely consolidation band between $83 and $91 in the near term, with a break above the upper end potentially carrying prices towards $98 and then $100. A drop below $83, by contrast, could expose $78 and $75.
The domestic crude contract showed a similar pattern. Prices pushed through ₹7,500 and briefly reached ₹7,975, but ₹8,000 again proved to be a ceiling. BusinessLine said support sits between ₹7,500 and ₹7,400, leaving the contract likely to move sideways between ₹7,400 and ₹8,000 unless one of those levels gives way. A breakout above ₹8,000 could point to ₹8,600, while a slide under ₹7,400 could open the way to ₹7,000.
The broader oil outlook remains mixed. In its August 2025 Short-Term Energy Outlook, the US Energy Information Administration projected a sharp rise in supply and said Brent could fall as low as $49 a barrel in spring 2026 as OPEC+ accelerates production and inventories build. That view stands in contrast to supply-shock scenarios highlighted by Fidelity, which noted that a conflict involving Iran and the closure of the Strait of Hormuz could send crude as high as $120 a barrel. For now, though, the market appears to be trapped between those extremes, with traders watching for a decisive break rather than chasing the current range.
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