Oil holds near highs as US strike fears recede; market on edge

Crude prices are trading in a narrow range close to their recent peaks as worries about an immediate US military action against Iran have subsided. Even so, the market continues to find support from the ongoing stalemate in negotiations, keeping the risk of a fresh escalation alive.

Talks between Riyadh and Tehran failed to yield any significant progress, with no deal announced to stop Houthi attacks or reduce hostilities between Saudi Arabia and the Yemeni group.

The Houthis struck at pumping stations on Saudi Arabia's East-West pipeline and at Riyadh airport on Wednesday. The East-West pipeline is a vital alternative export route, and any disruption—similar to the one seen in September—once sent oil prices sharply higher.

Going forward, crude prices should stay supported by Middle East tensions and the possibility of another US strike. In contrast, any easing in the Saudi-Houthi conflict or a surprise advance in US-Iran talks would likely spark a substantial pullback.

Daily Chart Analysis

The daily timeframe shows oil consolidating near recent highs, offering limited information as the main reference points are the channel's lower boundary and the resistance in the 110.00 area. A closer look is needed for further insight.

4-Hour Chart Analysis

On the 4-hour chart a minor uptrend line is shaping the bullish momentum. Buyers are expected to keep relying on this line, with a clear stop below it, to push prices toward new highs. Sellers, conversely, will seek a break below the trendline to drive a drop toward the channel's lower boundary.

1-Hour Chart Analysis

The 1-hour chart shows a minor downtrend line defining the current pullback. Sellers are likely to keep using this line, with a stop above it, aiming for a break below the uptrend line. Buyers want to see the price climb above the downtrend line to increase bullish bets toward the 110.00 resistance. The red lines mark today's average daily range.

Upcoming Catalysts

Today's US Consumer Confidence report is due, followed by the FOMC rate decision on Wednesday. Thursday brings the US GDP report, the PCE reading and the latest jobless claims figures. Friday ends with the US Employment Cost Index. Attention will remain fixed on developments in the Middle East.