Brent crude oil surged and then pulled back; technical signals suggest the $55 target is still within reach

Gate News update: Brent crude oil prices have recently seen increased volatility. After briefly falling below $100 during the session, they rebounded to $106. The market is closely watching geopolitical developments and technical signals. Trump’s remarks on Iran during the gold hour have drawn attention, but they did not specify when the Strait of Hormuz would reopen, increasing oil-price uncertainty.

Technical analysis shows that Brent crude oil has formed a $119 double-top pattern on the daily chart, while the RSI is showing a bearish divergence. Options market data also shows a surge in bearish positions, suggesting the uptrend may be capped. The double-top neckline is at $81. If the daily close breaks below this level, oil could trigger roughly 32% downside potential; the theoretical target price of $55 is still on the table.

Divergence has emerged between the options and spot markets. The BNO Brent crude oil ETF shows that put option trading volume has rapidly increased, while open interest remains steady, indicating traders are strongly engaged in short-term hedging. Meanwhile, the spot premium between the front-month and next-month Brent crude contracts has risen to $8.43, showing that tight spot supply is still supporting oil prices. If geopolitical tensions persist, the spot premium could offset the pullback pressure seen in the options market.

The key area to watch now is whether the $107 support level can hold. If the close is above $107, oil may again test the $119 upper limit. If it falls below $107, focus shifts to the $100 and $88 support levels; a further break would approach the double-top neckline and could trigger the predicted $55 target.

Overall, in the near term, oil prices may trade in a $100 to $119 range. For the $55 downside target to be triggered, three conditions must be met at the same time: confirmation of the double top and RSI divergence, sustained bearishness in options positioning, and easing geopolitical conditions. Investors need to closely monitor Strait of Hormuz supply dynamics and technical signals to judge Brent crude oil’s next move.