On the upside, a sustained move toward the 74 to 76 dollar region would likely require either a renewed geopolitical catalyst or a clear improvement in demand expectations. Conversely, a decisive break back below 69 dollars would weaken the current consolidation thesis and expose the market to a deeper retracement.
Position and Risk
In my view, the current crude oil setup favors a base case of continued consolidation with a mild upside bias in the short term. The market is showing resilience despite bearish forward narratives, which typically signals underlying support from positioning or risk premium dynamics.
The base case scenario is for Brent to remain broadly supported above 69 dollars over the coming weeks, with potential tests of the mid 70s area if geopolitical tensions remain elevated.
The main downside risk would come from a combination of stronger than expected supply growth and clear evidence of demand softening. A confirmed break below the 69 dollar support zone would be an early signal that the balance is shifting toward a more bearish regime.
Volatility should also be monitored closely, as compression phases in oil prices often precede sharper directional moves once a catalyst emerges.
Conclusion
Overall, oil remains in a delicate equilibrium between geopolitical support and softer forward expectations. The price structure above the 69 dollar zone suggests that the market is still in consolidation mode rather than entering a sustained downtrend.
My base case remains cautiously constructive in the short term, with range trading likely to persist unless a major demand shock or supply disruption forces a decisive breakout.
Looking ahead, traders should closely monitor Middle East developments, EIA updates, and broader risk sentiment, as these factors are likely to determine whether the next meaningful move in crude oil is higher toward the mid 70s or back below key support.
