Brent tests support at 100-day SMA

Demand-side fears are overtaking the supplies-staying-tight narrative, prompting oil to unwind its year-to-date gains, with both Brent and WTI futures bringing the curtains down on six consecutive months of gains.

Brent oil is holding tepidly above its 100-day simple moving average, clinging on for support as fears of greater demand destruction stemming from global monetary policy tightening weigh on the commodity’s prices.

However, once markets get more accustomed to recession risks, the drop in oil prices could be limited, likely keeping Brent above $100/bbl, given that crude markets still signal tight conditions and time spreads remain in backwardation.