FUNDAMENTAL
OVERVIEW

Oil prices continue to range around triple digit levels as the prolonged
US-Iran stalemate keeps traders on edge. This situation is unlikely to change until
we get a real breakthrough in negotiations and the reopening of the Strait of Hormuz,
or the war restarts.

Yesterday, we had Iranian reports saying that the US would propose a
temporary waiver to sanctions. That weighed on oil prices for a bit, but the
losses were quickly erased after US officials denied the reports.

Moreover, Trump said on Truth Social that a large-scale military strike
against Iran got suspended at the request of Gulf leaders to allow for peace
talks to continue. He added that there is a “good chance” of a deal
now.

This kind of headline noise has been keeping the market in rangebound mode.
The unlimited ceasefire is acting as a ceiling for oil prices on hopes of an
eventual end. The lack of breakthrough and some minor escalations though are
acting as a floor.

An official resolution and the reopening of the Strait should take oil
prices back to pre-war levels. If the war restarts though, we can expect oil to
rally into new cycle highs.

Another scenario sees the global economy falling into recession on central
banks tightening and selloffs in equity markets. That would eventually bring
oil prices lower although they might not go back to pre-war levels with the
Strait remaining closed.

CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAME

On the daily chart, we can
see that crude oil is still stuck in a range with the consolidation getting
narrower between the 93.00 support and the 110.00 handle. There’s really
nothing to see here as the price action continues to be driven by US-Iran
headlines. This is unlikely to change until we get a real breakthrough or the
restart of the war.

CRUDE OIL TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME

On the 4 hour chart, we have
an upward trendline defining the current bullish momentum. From a risk
management perspective, the buyers will have a better risk to reward setup around
the trendline to keep pushing into new highs. The sellers, on the other hand,
will look for a break lower to extend the pullback into the 93.00 support.

CRUDE OIL TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME

On the 1 hour chart, there’s
not much we can add here as the buyers will likely continue to lean on the
trendline, while the sellers will wait for a break to open the door for new
lows. The red lines define the average daily range for today.

UPCOMING CATALYSTS

Today, we have Fed’s
Waller speaking. Tomorrow, we have the FOMC meeting minutes. On Thursday, we
get the latest US Jobless Claims figures and the US Flash PMIs. US-Iran
headlines remain the main driver.