FUNDAMENTAL
OVERVIEW
Crude oil came
under some pressure yesterday and at some point, even threatened a major breakdown
below the rising channel. There was no reason for the downside given the
US-Iran stalemate and persistent disruptions. Sure enough, oil prices rebounded
and eventually erased almost all the weekly losses.
In terms of upside
catalysts, there’s been an escalation in Houthi attacks on Saudi Arabia, with
strikes targeting airports and reports of damage to energy infrastructure.
At the same time,
a developing storm in the Gulf of Mexico is threatening US oil and gas
production as well as refining capacity. The storm has already prompted
precautionary production shutdowns, while Reuters estimates that facilities
accounting for around 15% of US crude production and 5% of natural-gas output
could be affected. Several major refineries are also at risk of disruption.
The US-Iran
negotiations remain at a stalemate. Tehran has made reopening the Strait of
Hormuz conditional on the US meeting a number of demands, while Washington is
insisting on meaningful concessions from Iran, particularly on its nuclear
enrichment capacity. US Vice President JD Vance said this week that Washington
wants concrete action from Tehran rather than assurances, while Trump has
rejected Iran’s latest proposal.
This leaves the
oil market caught between improving physical exports and persistent disruption
risks. Middle Eastern crude flows have recovered significantly, but attacks on
infrastructure and shipping continue to threaten the reliability of those
supplies. Until there is meaningful progress in the US-Iran talks and a clearer
path toward reopening the Strait of Hormuz, the market is likely to maintain a
sizeable geopolitical and supply-risk premium.
CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that crude oil(CFD contract) dipped into the
lower bound of the channel and rebounded as the buyers stepped in, with a defined
risk below it, to position for a rally into the 110.00 resistance. The sellers
will need a break below the lower bound of the channel to open the door for new
lows and target a drop into the 68.00 support next, with the 80.00 handle as
the first target.
CRUDE OIL TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have
a minor downward trendline acting as resistance. The sellers will likely lean
on the trendline, with a defined risk above it, to target a break below the
lower bound of the channel and new lows. The buyers, on the other hand, will
look for a break higher to increase the bullish bets into the 110.00
resistance, with the 96.77 level as the first target.
CRUDE OIL TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add as the sellers will have a better risk to reward setup around
the trendline, while the buyers will need a break to open the door for new
highs. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Todaywe
have the FOMC meeting minutes. Tomorrow, we get the latest US Jobless Claims
figures. On Friday, we conclude the week with the University of Michigan
Consumer Sentiment survey. The focus, though, remains on the Middle East
developments.
This article was written by Giuseppe Dellamotta at investinglive.com.