Oil slips on de-escalation hopes as UN General Assembly looms

FUNDAMENTAL OVERVIEW

Oil prices have been drifting lower as traders price in the possibility of reduced tensions. The first downward move came after Saudi Arabia announced plans to restore around half of its East-West pipeline's capacity within days, with full restoration expected in roughly six weeks. US Energy Secretary Wright subsequently confirmed that pipeline flows could restart within days.

Further upside in crude was limited by several headlines pointing toward de-escalation, including reports that China has privately asked Iran to leverage its influence over the Houthis to curb their military operations against Saudi Arabia. There are also expectations for broader easing of tensions following the UN General Assembly, where Trump is set to meet with Gulf leaders to discuss next steps regarding the conflict with Iran, and may also hold talks with Iranian officials.

Iranian President Pezeshkian is slated to attend the Assembly after the US agreed to permit an Iranian delegation to enter the country for the event. Trump has indicated he is open to meeting with the Iranian President.

A reduction in hostilities would pull oil prices down as supply worries ease, whereas further escalation would likely spark another rally that could push WTI above $100 and possibly to its strongest levels since March.

CRUDE OIL TECHNICAL ANALYSIS – DAILY TIMEFRAME

Looking at the daily chart, crude oil (CFD contract) is rebounding from the support zone near the 93.00 level. Note that the gap lower in WTI stemmed from the futures rollover rather than any fundamental factor. Buyers are likely to keep stepping in around this support with a defined risk below it, aiming for a move back toward the 105.00 resistance. Sellers, meanwhile, will be looking for a break lower to build bearish positions toward the channel's lower bound around 85.00.

CRUDE OIL TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

On the 4-hour chart, a downward trendline is defining the bearish momentum. Should a pullback occur, sellers are expected to lean on the trendline with defined risk above it to continue pressing toward new lows. Buyers, conversely, will want to see a break higher to add bullish positions into the 105.00 resistance.

CRUDE OIL TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

The 1-hour chart offers little new information, as the 93.00 support and the downward trendline remain the key technical levels to watch. Sellers will look for a break below support or a rejection at the trendline to set up for new lows, while buyers will seek a bounce off support or a trendline breakout to push toward new highs. The red lines represent the average daily range for today.

UPCOMING CATALYSTS

Tomorrow, Trump meets with Gulf leaders and potentially Iran's President on the sidelines of the UN General Assembly. Wednesday brings the Flash US PMIs, followed by the Trump-Xi meeting on Thursday.