Oil slips as Mideast tensions linger and US-Iran talks stay stuck

Oil slipped back overnight, surrendering a portion of the previous session's advance, while the geopolitical backdrop stayed unchanged.

The Houthis' ongoing attacks on Saudi Arabia are maintaining elevated concern that energy infrastructure and shipping routes could face more disruption. In parallel, talks between the US and Iran are at an impasse, with no visible sign of a deal that would allow the Strait of Hormuz to reopen.

On the Russia-Ukraine front, a proposed truce covering energy targets remains uncertain after Kiev reported fresh Russian strikes on energy infrastructure. At the same time, a possible rise in Russian fuel exports might relieve some of the tightness in refined-product supplies, though the effect could be short-lived.

Oil prices are still the central channel through which geopolitical developments feed into the wider financial markets.

Going forward, Middle East events will continue to dominate attention. Should US-Iran talks produce a breakthrough, crude would likely drop sharply as supply expectations improve. If tensions escalate again, however, oil could climb back above the $100 mark.

Crude oil technicals on the daily timeframe

On a daily timeframe, crude oil (CFD contract) pushed to fresh weekly highs in the previous session before a pullback took hold. Should the price fall back to the lower edge of the channel, buyers are likely to step in with a stop below that channel, aiming for a climb toward the 110.00 resistance. Sellers, meanwhile, will be watching for a downside break so they can target a drop to the 68.00 support, with 80.00 as the first target along the way.

Crude oil technicals on the 4 hour timeframe

On the 4 hour timeframe, a gentle ascending trendline is marking the current bullish momentum. Buyers are expected to continue leaning on that line, with a stop placed underneath, as they try to press on toward 96.77. For sellers, a break lower would be the signal to extend the pullback down to the channel's lower boundary and then attempt to breach that level.

Crude oil technicals on the 1 hour timeframe

On the 1 hour timeframe, a slight downward trendline is shaping the ongoing pullback. Sellers are likely to keep using it as their guide, with a stop above the line, as they push toward fresh lows. Buyers, by contrast, want to see the price break higher so they can enter and target a run to 96.77.

Upcoming events

The US CPI report is due tomorrow. Thursday brings the US PPI, US Retail Sales and the latest US Jobless Claims data. Even so, the primary focus stays on US-Iran talks.