Brent crude oil is trading near $94 a barrel, bouncing off the lower edge of a rising channel after a 20% slide from its May high. The rebound comes as the International Energy Agency reports global inventories fell by roughly 246 million barrels across March and April, and some Asian markets have already begun rationing petroleum products.
The 246-Million-Barrel Drawdown
Observed worldwide stockpiles dropped sharply through the spring, according to the IEA. In the United States, distillate inventories are at their lowest since 2003. Chevron CEO Mike Wirth warned that crude and product inventories are drawing down across the board, calling June and July critical months for supply. Some Asian markets have already imposed rationing on petroleum products, a sign that the squeeze is reaching consumers.
Exxon and Chevron Flag Critical Months Ahead
ExxonMobil senior vice president Neil Chapman projects Brent could spike to $150 or $160 per barrel if the supply picture worsens. Chevron's Wirth stressed that summer demand will test an already tight system. Meanwhile, ADNOC CEO Sultan al-Jaber warned that full flows through the Strait of Hormuz may not return before 2027, prolonging the risk of disruption. Traders have taken notice: the put-call ratio on the United States Brent Oil Fund collapsed since late May, signaling bullish positioning.
Technical Indicators Point to a Potential Breakout
Brent is trying to reclaim its 20-day exponential moving average near $99. A hidden bullish divergence on the relative strength index has appeared — the same pattern that preceded a 33% rally in the past. The first resistance level is $96; a break above that would set up a move to $101. Measured move targets beyond that range from $119 to $137 and, in an extended rally, $167. But a bearish crossover of the 20-day and 50-day EMAs could undermine the recovery and tip the outlook weak.
For now, all eyes are on whether Brent can clear $96 and then $101. A confirmed move above those levels would open the door to $119, $137, and eventually $167. But if the 20-day EMA crosses below the 50-day EMA, the outlook turns bearish. Traders and policymakers alike are watching the Strait of Hormuz and summer demand.
