Oil Rally Stalls As Brent And WTI Enter Consolidation After Geopolitical Surge

(MENAFN- The Rio Times) Oil prices surged on June 15 after a sharp escalation in Middle East tensions, but the rally lost momentum as markets entered a consolidation phase.

Official price charts for Brent and WTI show that both benchmarks spiked to multi-month highs late last week, then failed to extend gains overnight. Instead, prices drifted lower, with Brent slipping from its peak near $74 to around $72.

WTI also retreated from highs above $72 to near $70. The 4-hour and daily charts for Brent and WTI reveal that the initial price jump pushed both contracts well above their 20, 50, and 200-period moving averages.

However, after the surge, candles show smaller bodies and upper wicks, indicating selling pressure and profit-taking. The Relative Strength Index (RSI) for both benchmarks remains elevated-Brent at 72.50 on the 4-hour and 74.48 on the daily.

WTI stands at 72.85 and 74.92, signaling overbought conditions. The MACD remains positive, but the histogram bars have begun to shrink, reflecting slowing upward momentum.



Bollinger Bands on both timeframes expanded sharply during the rally, but prices now hover near the upper band without breaking higher. This pattern often signals exhaustion after a rapid move.

Support levels have firmed around $71.5 for Brent and $69.5 for WTI, with resistance at $74 and $72, respectively. Volume indicators show that trading activity spiked during the rally, then eased as consolidation set in.
Oil Market Cools After Geopolitical Rally
Fundamentals remain driven by geopolitical risk. The Israeli strike on Iran's South Pars gas field and the subsequent platform shutdown triggered the initial rally, as traders priced in possible disruptions to regional oil flows.

Yet, no physical supply interruption has occurred, and official data from OPEC + and the US EIA still point to ample global supply. Macroeconomic headwinds persist, with weak Chinese growth and cautious global demand forecasts tempering the bullish narrative.

ETF flows confirm the shift in sentiment. After heavy inflows during the rally, oil ETFs recorded outflows as investors locked in profits and reassessed risk. Broader markets reflected the uncertainty, with equities under pressure and the dollar strengthening as investors sought safety.

Technical analysis and fundamentals now align: the market remains overbought, and the risk premium persists, but without fresh escalation or actual supply loss, prices have paused.

The next move depends on developments in the Middle East and whether support levels hold. If tensions ease or supply remains stable, a deeper pullback is possible. If new risks emerge, the rally could resume.

The story behind the numbers is clear. The oil market responded swiftly to geopolitical headlines, but traders now wait for confirmation before committing to higher prices. The consolidation phase reflects caution and the need for new catalysts.

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