Just yesterday, we discussed how oil was finding its bottom, and today black gold prices have risen following a series of attacks on vessels in the Strait of Hormuz, reminding the market of the persistent dangers to shipping in this key waterway.

Brent crude approached $73 per barrel, rising by 1.1%, while WTI surpassed $69. However, this increase contrasts with the overall fundamental backdrop, which remains persistently bearish, leading most analysts to view the rebound as temporary.

The reason for the rise was specific incidents. The laden tanker Al Rekayyat was hit by a projectile off the coast of Oman upon exiting the strait. The UK Maritime Trade Operations confirmed the attack, and Axios, citing a U.S. official, reported that Iran launched at least two missiles at commercial vessels, two of which were damaged without reports of casualties. The strait, which connects Gulf producers to global markets, has only partially reopened following near-total closure during conflict, and while movement is recovering, volumes remain below pre-war levels.

The diplomatic backdrop surrounding these attacks remains tense. Iranian Foreign Minister Abbas Araghchi stated that negotiations for a final agreement with the U.S. will not begin if threats continue.

It is this fundamental weakness that remains decisive for the market, outweighing geopolitical factors. The most telling signal was Saudi Aramco's decision to lower the price of Arab Light oil for Asia by $11 per barrel for next month, bringing it to $1.50 below the benchmark. Clearly, Saudi Arabia is lowering prices to make it economically viable for Asian buyers to charter tankers to enter the strait despite the risks. In other words, the kingdom is aggressively competing for market share, which directly pressures prices. This move by Riyadh followed OPEC+'s decision to increase production quotas for the next month. Although the additional barrels are largely theoretical at this point, the direction is clear. The group intends to boost supply as the situation normalizes.

Additional clarity is expected from the U.S. Energy Information Administration's short-term forecast, which will be released today. Last month, the agency raised its 2027 U.S. production forecast to 13.83 million barrels per day.

The picture is one where geopolitical issues and fundamentals pull oil in different directions. Attacks on vessels create a short-term risk premium and can drive short-term rebounds like today's; however, strong pressure from supply recovery, increases in OPEC+ quotas, and aggressive price cuts from producers keep the market in a downward trend.

From a technical perspective, buyers need to reclaim the nearest resistance at $69.58. This would allow them to target $71.69, above which it will be quite challenging to break through. The furthest target will be around $73.79. In the event of a price drop, bears will attempt to regain control over $67.22. If this is achieved, a breakout of this range will deal a serious blow to bull positions and drive oil down to a low of $63.79, with the potential to reach $59.96.