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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.

Brent tests support at 100-day SMA

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.

 

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