Brent crude oil price pulled back today, September 11, as traders started booking profits after the recent rally. It also retreated ahead of a potential meeting between Iran and Gulf countries. It was trading at $104, down modestly from this week’s high of $109.85.
Iran and Gulf countries meeting
Brent and West Texas Intermediate benchmarks are falling today after a Financial Times report said that Iran and Gulf countries were planning a meeting in Oman to negotiate a deal to reopen the Strait of Hormuz.
Such a meeting will be the first one since the war started six months ago. The countries expected at the meeting are Bahrain, Kuwait, Qatar, Oman, Saudi Arabia, and the United Arab Emirates.
The meeting comes as these Gulf allies remain concerned about the state of the energy market. For one, President Donald Trump said that he believes that the war with Iran will end after the midterm elections, which is nearly two months away.
At the same time, oil exports from these countries have reported a sharp retreat in oil exports this month. Data released this week showed that Saudi Arabia’s oil exports dropped to 3.6 million barrels a day in August, the lowest level in 13 years. The same is happening among most of these countries.
The meeting comes at a time when these countries are questioning their relationship with the United States after coming under substantial attacks from Iran. At the same time, the US has not come to their defense. According to Axios, Donald Trump rejected calls from Mohamed bin Salman to attack Houthi rebels.
Therefore, there is a likelihood that these countries will press Iran to reopen the Strait in exchange for financial incentive. It is understood that some countries, including Qatar and the UAE, have reportedly paid Iran, which explains why it has avoided attacking them.
Concerns in the energy markets remain
Crude oil price faces some major risks ahead. One of them is that the crisis between Saudi Arabia is escalating with no end in sight. Houthis, helped by Iran, have already taken a strategic city and port and will now continue attacking Saudi Arabian ports.
Additionally, a deal between the two sides remains significantly further away, with Trump ruling out any talks. As a result, there is a risk that the global oil supply will remain under pressure this year. In a statement, the IEA said that the world supply is expected to drop by about 5.7 million barrels a day this year. While demand is falling, the report warned that supply was falling faster.
Brent crude oil price technical analysis
Brent crude oil price chart | Source: TradingView
The daily chart shows that Brent has been in a strong upward trend in the past few months. It has soared from a low of $70 in July to a high of $109.84. This surge continued after Houthis progress on its battle against Saudi Arabia.
Technically, oil has moved above all moving averages. At the same time, it is attempting to retest the key support level of $101.8. That is a sign that it is forming a break-and-retest pattern, which is often a continuation sign. Therefore, there is a likelihood that the Brent will resume the uptrend in the coming weeks as investors target the key resistance at $119, the highest point this year.
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