Crude oil trades in tight range as US-Iran talks dominate, Hormuz attacks ongoing

FUNDAMENTAL OVERVIEW

Crude oil has remained in a consolidation phase as market attention shifts to US-Iran talks, with traders waiting for fresh developments.

Since the UN General Assembly, direct confrontation between the US and Iran has de-escalated, though attacks on ships in the Strait of Hormuz continue as Iran maintains its blockade.

Over the weekend, Iranian Parliament Speaker Ghalibaf repeated that the Strait of Hormuz would stay closed until Iran's conditions are met. Tehran indicated it had received a US reply via intermediaries, though further issues still require discussion.

Iranian Foreign Minister Araghchi affirmed that Tehran is still committed to diplomatic efforts, but cautioned that Iran is ready to retaliate militarily if the US restarts attacks.

Earlier today, AFP reported that the Saudi East-West pipeline had been shut down following new attacks. This drove oil prices higher initially, though some of those gains were reversed after subsequent reports indicated the pipeline was operating normally.

Looking forward, an agreement in US-Iran talks would likely push oil prices down sharply, whereas an extended deadlock or renewed escalation would continue to underpin the market and drive it to new highs.

CRUDE OIL TECHNICAL ANALYSIS – DAILY TIMEFRAME

Crude oil is consolidating near the lower boundary of a channel. Buyers are likely to continue entering near the bottom trendline, with a clearly defined risk below it, aiming for a rally to the 110.00 resistance. Sellers, meanwhile, will watch for a breakdown to initiate short positions targeting a drop to 68.00 support, with 80.00 as an initial milestone.

CRUDE OIL TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

The recent sideways price movement is more evident on the 4-hour timeframe, as market participants focused on US-Iran talks and waited for updates. From a risk-reward standpoint, buyers have a favorable setup near 88.00 for targeting new highs, while sellers require a break below the channel's lower boundary to aim for new lows.

CRUDE OIL TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

After Friday's new lower low, a downward trendline may now serve as resistance. If the price rises to this trendline, sellers are expected to sell against it, with a clearly defined risk below, aiming for a decline to the channel's lower boundary. Buyers, conversely, will seek a breakout above the trendline to enter long positions targeting 96.77 next.

UPCOMING CATALYSTS

The US ISM Services PMI is due today. Wednesday brings the FOMC meeting minutes. Thursday's US Jobless Claims data is scheduled, and Friday will see the University of Michigan Consumer Sentiment survey. However, US-Iran developments remain the primary driver.