Oil Opens Week Lower After US Holds Off on Iran Strike; Attack Risk Lingers

Oil prices rallied sharply on Friday, when expectations of US attacks on Iran over the weekend were building. That scenario did not play out, leaving crude to open the week on a downbeat note.

Trump, however, has indicated that strikes may pick up again after the US midterm elections. That threat is likely to keep supporting crude prices.

Meanwhile, senior officials from Saudi Arabia, Turkey and Pakistan are due to hold talks in Tehran with Iran's leadership today, in what would be the first high-level engagement since Saudi Arabia entered the war against the Houthis. Reuters sources describe the gathering as an effort to coordinate regionally as Houthi attacks escalate and US-Iran tensions mount.

Looking further ahead, oil prices should stay supported by Middle East tensions and the chance of another US attack. On the flip side, an easing of the Saudi-Houthi conflict or an unexpected improvement in US-Iran talks would likely bring a sharp correction.

DAILY TIMEFRAME TECHNICAL ANALYSIS FOR CRUDE OIL

The daily chart shows crude oil (CFD contract) gradually moving toward the 110.00 resistance zone. Should it reach that area, sellers are expected to step in with risk defined above the level, aiming for a decline back toward the lower boundary of the channel. Buyers, by contrast, are waiting for a break higher that would allow them to add to bullish positions, with 117.00 as the next target.

4-HOUR TIMEFRAME TECHNICAL ANALYSIS FOR CRUDE OIL

On the 4-hour chart, a modest upward trendline is defining the bullish momentum. Buyers are likely to keep leaning on that trendline, using risk below it as protection, while pushing for fresh highs. Sellers, for their part, are watching for a break to the downside to continue the fall toward the channel's lower bound.

1-HOUR TIMEFRAME TECHNICAL ANALYSIS FOR CRUDE OIL

The 1-hour chart offers little new information beyond the same pattern: buyers still have the better risk-reward near the trendline, while sellers require a move below it to aim for a deeper pullback to the channel's lower bound. The red lines represent today's average daily range.

CATALYSTS AHEAD

The US Consumer Confidence report is due tomorrow. The FOMC rate decision lands on Wednesday. Thursday brings the US GDP report, the US PCE and the newest US Jobless Claims figures. The US Employment Cost Index rounds out the week on Friday.