The May’25 Brent futures contract increased from an intraday low of $69.70/bbl on 13 Mar up to a weekly high of $72.00/bbl on 18 Mar. The May’25 contract then sold-off on 19 Mar to $70.00/bbl, which acted as a support level as prices recovered to $71.80/bbl by the time of writing on 19 Mar. There has been a noticeable shift in sentiment this week compared to the previous fortnight where market players were largely risk-off. Onyx COT positioning showed that market players became less bearish this week, increasing from -44k lots on 12 Mar up to -32k lots on 20 Mar. In addition, technical indicators show that bullish momentum has started to pick up, with the MACD line crossing above the signal line for the first time in almost a month on 18 Mar. Bullish sentiment in crude oil prices this week has been driven by geopolitical tensions, with Russia-Ukraine peace talks remaining a key market focus. Following a phone call with Trump on March 18, Putin rejected a ceasefire, instead demanding an end to Western military support for Kyiv. Ongoing attacks on energy infrastructure from both sides highlight a continued reluctance to reach a truce. Meanwhile, in the Middle East, US strikes on Yemen’s Houthis have further strained relations with Iran, making the Red Sea route almost unnavigable for tankers. These attacks come amid the looming threat of full-fledged sanctions on Iran, with the US targeting one of China’s largest teapot refineries today for purchasing Iranian oil. It remains to be seen how long this recent strength in Brent will last and whether price has enough momentum to sustainably breach the $72/bbl level.
