Oil Buyers Struggle to Reverse One-Month Downtrend

Market Overview

Oil prices edged higher on Wednesday as traders assessed potential supply disruptions in the U.S. and Russia, while geopolitical uncertainty surrounding the Ukraine peace talks kept market sentiment cautious. Brent crude reached a one-week high, reflecting a shift in market dynamics. However, traders remain watchful for further clarity on global supply conditions and upcoming inventory reports.

Technical Analysis

Brent crude is showing signs of losing downside momentum on the four-hour chart, as buyers re-enter the market and push prices higher. The break above the $76.519 resistance level indicates a potential shift in sentiment, with oil attempting to recover from its month-long decline.

Currently, prices are approaching the immediate resistance at $76.959. A successful breach of this level would pave the way for a rally toward $77.622 and $78.138, aligning with key Fibonacci expansion levels. If bullish momentum persists, a move toward the long-term target of $79.241 could come into play.

Momentum indicators support the recovery attempt, as RSI remains in positive territory, while MACD histograms trend higher, confirming renewed buying interest.

However, failure to sustain gains above the broken trendline could invite selling pressure, with $75.901 and $74.900 acting as key support levels. A decisive break below $74.900 would invalidate the recovery scenario, exposing oil to further downside risk.

Key Technical Levels

• Resistance Levels: $76.959, $77.622, $78.138, $79.241
• Support Levels: $76.519, $75.901, $74.900

Fundamental Drivers

U.S. & Russian Supply Concerns: Market participants remain on edge about potential disruptions in oil production.

Ukraine Peace Talks: Uncertainty over negotiations may impact risk sentiment and global demand projections.

EIA Weekly Crude Inventories: Thursday’s Energy Information Administration (EIA) report will provide insights into U.S. demand trends and potential stockpile fluctuations.

Global Growth Outlook: Concerns about economic slowdowns in China and Europe continue to weigh on the long-term demand outlook.

Conclusion

Brent crude is attempting to break out of its month-long downtrend, with key resistance at $76.959 acting as a pivot level for further upside. If buyers maintain control, the next targets stand at $77.622 and $78.138. However, a failure to sustain momentum could bring $75.901 and $74.900 back into focus, reinforcing the broader bearish outlook.

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