Crude oil consolidates as US-Iran deal prospects and escalation fears balance out

Crude oil has recently moved into a consolidation phase while markets look for fresh signals on US-Iran talks. So far, there has been no change.

Trump stated in a CNN interview that the US is unlikely to resume military strikes against Iran if negotiations show enough progress on Tehran’s nuclear programme and the reopening of the Strait of Hormuz. But he underscored that avoiding further attacks would require Iran to agree to a sufficiently robust deal, adding that Washington is still prepared to use military force if needed.

US Secretary of State Rubio described the negotiations with Iran as having made only limited headway, calling Tehran’s demands unacceptable, while reiterating that Washington remains willing to pursue a diplomatic solution.

US military action remains a possibility, with Trump potentially considering targeted strikes against Iranian nuclear sites rather than more extensive attacks on energy infrastructure.

A deal breakthrough would likely trigger a sharp selloff and bring oil prices back to pre-war levels in a relatively short period. Conversely, an escalation could spark another rally driven by a rising risk premium, though there is a chance such gains might be brief if Trump carries out limited strikes merely to save face before exiting the conflict.

CRUDE OIL TECHNICAL ANALYSIS – DAILY TIMEFRAME

On the daily chart, crude oil (CFD contract) is consolidating near the key 87.00 level. Buyers are expected to continue stepping in around these levels, with a defined risk below 87.00, to position for a move toward the 110.00 resistance. Sellers will look for a breakdown to increase bearish bets toward the 68.00 support next, with 80.00 as an initial target.

CRUDE OIL TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

On the 4-hour chart, there is little to gather from this timeframe, but the broken channel could act as resistance should price retest the bottom trendline. Sellers are expected to step in there, with a defined risk above the trendline, to continue targeting new lows. Buyers will look for a break higher to increase bullish bets toward the 110.00 resistance.

CRUDE OIL TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

On the 1-hour chart, there is a minor support zone around the 89.00 level, where price has been rejected several times in recent days. Buyers are likely to keep stepping in around support, with a defined risk below it, to push toward new highs. Sellers will want to see price break lower to extend the pullback into the 87.00 level next. The red lines define the average daily range for today.

UPCOMING CATALYSTS

Tomorrow the US CPI report is due. On Thursday, the latest US Jobless Claims figures are released. On Friday, the week ends with US PPI data. The focus will remain on US-Iran developments.