Brent crude futures rallied strongly in July, consolidating above the $86 support level and the 200-day moving average. As a result, our previous thesis played out: the downward trend reversal proved to be a false break. As a reminder, we previously questioned a sustained decline in oil prices due to: (1) the ongoing military conflict in the Middle East and the closure of the Strait of Hormuz, and (2) global oil inventories remaining at multi-year lows.

Long-term trend: Up
Resistance level: 120
Support level: 70, 86