Oil prices climb after Trump rejects Iran's Hormuz deal and threatens more strikes

FUNDAMENTAL OVERVIEW

Crude oil faced pressure at the beginning of last week as hopes grew for a de-escalation and an earlier conflict resolution ahead of the UN General Assembly.

Those expectations began to diminish when Trump reiterated that the US would negotiate with Iran only after the November elections. His statements dampened optimism for a quick resolution and helped push oil prices higher again.

Over the weekend, hopes for a US-Iran agreement revived after Iran proposed conditions to reopen the Strait of Hormuz within a week. Trump rejected the proposal on Saturday and told reporters he anticipated resuming bombing Iran after the midterms.

Oil started the week higher and continued climbing after IRNA news reported no plans for fresh talks with the US and that the Foreign Minister will return to Tehran on Tuesday.

Looking ahead, a breakthrough in negotiations would quickly drive oil prices lower, while a continued deadlock or renewed escalation would keep the market supported and push prices to new highs.

Trump currently faces multiple constraints, making an end to the war more probable than not. The timeline remains uncertain and has been the key driver of recent price movements.

CRUDE OIL TECHNICAL ANALYSIS – DAILY TIMEFRAME

On the daily chart, crude oil (CFD contract) climbed back above the key 93.00 zone as expectations for a swift US-Iran deal faded. Buyers entered with a defined risk below the zone, aiming for a rally to the 110.00 resistance. Sellers want to see the price fall back below the 93.00 zone to target a drop to the lower channel boundary near the 85.00 handle.

CRUDE OIL TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

On the 4-hour chart, the price is likely to make a new higher high in the coming days, with an upward trendline then defining bullish momentum. If a pullback to the trendline occurs, buyers are expected to support it with a defined risk below, targeting the 110.00 resistance. Sellers will look for a break below the trendline to enter for a drop to the lower channel boundary.

CRUDE OIL TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

On the 1-hour chart, a minor trendline defines bullish momentum on this timeframe. Buyers will likely continue to support the trendline with a defined risk below, targeting new highs. Sellers will look for a break lower to extend the pullback to the 4-hour trendline.

UPCOMING CATALYSTS

Tomorrow brings the US Consumer Confidence report and US Job Openings data. Wednesday features the US ADP and US PCE price index. Thursday includes the US ISM Manufacturing PMI and US Jobless Claims figures. Friday ends the week with the US NFP report. The main focus remains on Middle East developments.