Oil slips as Saudi aims to restore half pipeline capacity, Trump to meet Gulf leaders

FUNDAMENTAL OVERVIEW

Oil prices have been gradually declining since yesterday after Saudi Arabia announced plans to restore about half the capacity of its cross-country pipeline within days, easing some recent supply fears.

Saudi Aramco stated it is working to circumvent a damaged section of the route, enabling partial resumption of pipeline capacity. The company expects the pipeline to be fully operational again in about six weeks.

Trump informed reporters on Tuesday that the US is “hopefully toward the end” of the war with Iran and that he has spoken “directly” with Tehran. That statement marks a shift from his earlier hawkish stance, where he indicated the war would continue past the midterms. Higher oil prices, rate hikes and elevated bond yields may be increasing pressure on Trump to seek an exit.

Axios reported that Trump is expected to meet with Gulf leaders on the sidelines of the UN General Assembly in New York next Tuesday to discuss next steps in the Iran war. The news outlet noted that last year, Trump met with leaders from eight Arab and Muslim nations during the UN General Assembly and presented them with his draft Gaza peace plan, which he made public a week later. A deal to end that war was reached shortly after.

Combined, these developments point to possible de-escalation, which may keep oil prices contained near recent highs for the time being. Stronger signs of de-escalation would likely trigger sell-offs in oil.

CRUDE OIL TECHNICAL ANALYSIS – DAILY TIMEFRAME

Crude oil (CFD contract) rejected the key resistance zone near 105.00 and pulled back. Sellers entered around that resistance with a defined risk above it, positioning for a decline to the lower channel boundary near 85.00. Buyers, meanwhile, look for a breakout above resistance to boost bullish bets toward 111.00.

CRUDE OIL TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

An upward trendline defines the bullish momentum on the 4-hour timeframe. Buyers are likely to rely on this trendline with a defined risk below it to continue pushing toward new highs. Sellers, conversely, seek a break below to increase bearish bets toward the lower channel boundary.

CRUDE OIL TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

A minor downward trendline defines the recent pullback toward the 4-hour trendline. Sellers are expected to continue leaning on this trendline to push into new lows, while buyers look for a breakout higher to enter with more conviction for new highs.

UPCOMING CATALYSTS

US Jobless Claims figures are due today, but traders remain focused on Middle East developments.