Why Brent Oil Just Snapped Back Above $105

Market Reaction to US-Iran Tensions

Brent oil prices jumped nearly 5% to $105 per barrel on Thursday, their highest level in almost a month. The move reverses a slide that briefly pushed Brent below $100 earlier in the week. Reports that Washington is preparing renewed strikes on Iran drove the rally.

Geopolitical Risk and Supply Chain Concerns

The US Central Command has ordered preparations for large-scale combat operations against Iran, with possible targets including nuclear, energy, and infrastructure sites. US and Israeli sources suggest strikes could occur before Israel's Oct. 27 election and the Nov. 3 US midterms.

Market Analysis and Outlook

Citigroup analysts noted that the market continues to price tightness, supply fragility, and geopolitical risk. Brent oil prices could target the 0.786 Fibonacci level at $108.94, about 3.5% above current prices, if the breakout holds. A confirmed strike on Iranian energy sites could accelerate the move towards $109.

Weather and Inventory Concerns

Hurricane Isaias is expected to make landfall late Friday or early Saturday, forcing US Gulf of Mexico producers to shut in over 510,000 barrels per day. Crude inventories fell by about 3.2 million barrels last week, the largest weekly draw in five weeks.