Brent Crude futures faced a turbulent week of trading, caught in a violent tug-of-war between deteriorating fundamentals and escalating geopolitical risks. While the contract managed to close the week at $67.75—up 0.34% on Friday—the broader trend reveals a market on shaky ground. Investors are currently weighing a “record” projected supply glut against the immediate fear of conflict in the Middle East, leaving the commodity range-bound but heavy.

The “Surplus Shock” of 2026

The primary driver of this week’s volatility—specifically the sharp drop observed on the 5-day chart around February 12—was the release of the International Energy Agency’s (IEA) latest Oil Market Report. The data painted a grim picture for bulls: global oil supply is projected to outpace demand by a staggering 3.7 million barrels per day in 2026. This forecasted glut, driven by robust non-OPEC+ production and slowing demand growth in China, triggered an immediate repricing of risk assets. The market’s reaction was swift, sending Brent tumbling from highs near $69.50 to test support levels, as traders digested the reality that the market is structurally oversupplied.

Geopolitical Risk Premiums Hold the Line

Despite the bearish fundamental data, oil prices have refused to collapse completely, largely due to the “war premium” currently priced into the market. Tensions between the US and Iran remain at a boiling point, with naval deployments in the region and threats regarding the closure of the Strait of Hormuz keeping short-sellers cautious. As seen in the chart’s recovery on Friday (February 13), every dip toward the $66.80 range was met with buying interest. The market is effectively betting that while the world has too much oil, a geopolitical spark could momentarily cut off access to it, necessitating a risk premium of roughly $5-$7 per barrel.

Technical Setup: The $66 Defense

Technically, the BZ=F contract is forming a precarious consolidation pattern. The 5-day chart clearly illustrates a failure to hold the **$69.00** psychological level, followed by a capitulation mid-week. However, the bounce from the 66.89 intraday low suggests that distinct demand exists at these levels. Volume on the recovery was moderate (39.98k), indicating that this is likely short-covering rather than aggressive new bullish positioning. As long as prices remain below the $70 threshold, the technical bias remains neutral-to-negative, with the bears controlling the broader narrative.

Outlook: A Delicate Balance

Looking ahead to next week, the market’s focus will remain split. Traders should closely monitor the $66.50 – $66.90 support zone; a breach below this level could trigger a rapid descent toward $62 as the IEA’s surplus narrative takes full control. Conversely, any escalation in the Persian Gulf could quickly force prices back toward **$70**. For now, upside appears capped by the supply reality, while downside is protected by the fear of war. Investors should remain agile, as headlines—rather than fundamentals—will likely dictate the next 48 hours of price action.