Key Takeaways

-Brent oil (UKOUSD) traded near $108.62 on Tuesday, 3 November, up 0.40% after falling sharply from above $118.

-Iran’s president said his government has extra authority to pursue talks, while President Trump indicated an agreement remains possible.

-Easing supply risks will depend on agreements that improve oil exports and shipping conditions.

-The US midterm elections are the next market catalyst, with traders watching for any shift in Washington’s stance towards Iran.

-Traders are watching $109.28–$110 for a potential recovery breakout and $108 for further downside risk.

Brent is attempting to stabilise after a steep decline, but the rebound has recovered only a small portion of the earlier losses. The technical picture remains fragile, with the nine-period moving average sloping down towards price and recent candles sitting near the bottom of the decline.

Buyers have yet to establish a sustained sequence of higher highs and higher lows.

Why Traders Are Watching Brent Oil

The broader sell-off followed signs of diplomatic progress between the US and Iran, including Qatar-mediated discussions that strengthened expectations of easing supply risks. Traders are assessing whether negotiations could improve oil supply and shipping conditions, although diplomatic statements can only reduce immediate concerns. A sustained fall in disruption risks would depend on implementation.

The election adds further uncertainty. Brent ended October at a six-month high amid concerns that the conflict could escalate after the vote, leaving the market sensitive to any change in Washington’s position.

Key factors influencing Brent’s outlook include:

-Diplomatic Progress: Whether US–Iran talks produce agreements that improve exports and shipping.

-Supply Risk Premium: Whether the premium attached to supply risks continues to shrink.

-US Midterm Elections: Whether the vote changes Washington’s approach to Iran.

-Geopolitical Escalation: Whether stalled talks or military activity threaten oil flows again.

Key Trading Levels

Brent is consolidating near the lows of its recent decline. Holding $108 would support near-term stabilisation, although a recovery remains unconfirmed.

A sustained break above $109.28, followed by a successful retest, could open a move towards $110. Continued buying could then bring $112 into focus, with $112.50–$113 and $114–$114.50 beyond that if higher lows develop.

However, a break below $108, following a failure around $109.28–$110, could expose $107.50 and then $107.30. A sustained break below $107.30 that fails to reclaim the recent low zone would suggest further weakness towards $107 and $106. Note that $106 is a potential downside reference rather than a previously tested floor.

Bottom Line

Brent’s direction depends on whether diplomacy translates into more reliable exports and shipping. Further progress could keep prices under pressure and limit recovery attempts by shrinking the supply risk premium. Stalled negotiations, intensifying military activity or fresh disruption could prompt traders to price supply risks back in.

For more information on Brent oil and key trading levels, read the full article.