FUNDAMENTAL OVERVIEW
Crude oil prices came under some pressure in the final part of last week as we got a couple of bearish catalysts. On the US-Iran negotiations front, there have been many mixed signals, but it looks like the Iranians are willing to compromise given the bleak consequences that a no-deal could have.
In fact, the US is said to be prepared to sustain weeks-long operations against Iran if needed. Given the uncertainty, it shouldn’t be surprising to see a rangebound price action in the crude oil market. Tomorrow, we have the second round of talks in Geneva, so watch out for market-moving headlines.
On the OPEC+ front, we got a report on Friday saying that some nations see scope to resume oil output hikes in April, although a decision hasn’t been made yet and talks will continue ahead of the March 1 meeting.
CRUDE OIL TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that crude oil is consolidating between the 66.43 and 62.35 levels as negotiations between US and Iran continue. There’s not much we can glean from this timeframe, so we need to zoom in to see some more details.
CRUDE OIL TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see the price broke below the upward trendline which could either signal a reversal or just a more complex pullback. For now, the price is consolidating at the 62.35 support as the buyers continue to step in to keep pushing into new highs. The sellers will want to see the price breaking lower to extend the drop into the 61.14 level next.
CRUDE OIL TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can see more clearly the rangebound price action at the 62.35 support. We have a strong resistance zone around the 63.30 level where we can also find the confluence with the downward trendline defining the bearish momentum. The sellers will likely continue to lean on the trendline with a defined risk above the resistance to target a break below the 62.35 support, while the buyers will look for a break higher to increase the bullish bets into the 66.00 handle next. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Tomorrow we have the second round of US-Iran nuclear talks in Geneva. On Wednesday, we have the FOMC Meeting Minutes. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US Q4 GDP, the US PCE price index for December, the US Flash PMIs and a potential US Supreme Court decision on Trump’s tariffs.
