Brent crude futures settled at $116.72 on Friday, their highest since April 29, as Middle East security threats feed supply concerns. Inventories and spare capacity leave little buffer, and the $120 region now forms the key resistance test.
Brent crude futures settled Friday at $116.72, up 3.1% on the day. The settlement was the highest since April 29, and it extended Brent's advance to a third consecutive week.
Brent gained approximately 6% over the week. From its October 2 settlement at $102.77, it has risen approximately 13.6%, which ActionForex reads as a sustained repricing of geopolitical supply risks rather than a reaction to the latest headlines.
Saudi attacks and Iran reports lift the risk premium
Houthi attacks and claims involving Saudi energy installations, airports and shipping infrastructure have heightened concerns about further disruption. Aramco also evacuated personnel from its Dhahran headquarters, which added to the uncertainty.
A separate worry is the reported preparation of US-Israeli military options for renewed strikes against Iran after the November 3 US midterm elections. However, no new military operation has been approved, and Trump's public comments have offered mixed signals.
Thin supply buffers magnify the move
The market has little room to absorb another shock. The IEA says global production recovered by 2.5 million barrels per day to 102.3 million in September, yet effective OPEC+ spare capacity stands at just 0.27 million barrels per day.
Observed inventories also remain substantially below pre-war levels. On the other side, the IEA forecasts a 2026 demand contraction of 2.6 million barrels per day, which indicates that elevated prices are already weighing on consumption.
Resistance clusters near $120
Technically, the March high at 119.50 sits just below the 120.53 projection level, the 100% projection of the rise from 84.56 to 109.97, measured from 95.12. A sustained break above that region would strengthen the case for an extension toward 136.23.
Daily RSI has risen to approximately 74, which indicates increasingly stretched momentum. An initial rejection around $120 would therefore not be surprising.
Source: ActionForex
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