FUNDAMENTAL OVERVIEW
Oil prices are consolidating between key levels as traders await new developments from the US-Iran negotiations. On Wednesday, prices surged after reports suggested that US-Iran talks scheduled for today were called off. The gains were eventually erased after Iran’s foreign minister said the talks were still on.
Given the low probabilities of a quick agreement between US and Iran, we might continue to see oil prices bid into the weekends as the risk of a military escalation remains high.
On the macro side, OPEC+ held output steady as expected over the weekend. This continues to support the market amid improving demand. In fact, unless we get more output hikes or the market starts to bet on Fed’s rate hikes, the outlook for oil prices should remain skewed to the upside.
CRUDE OIL TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that crude oil is consolidating between the 66.44 and 62.37 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 that we have a trendline defining the bullish momentum. The buyers will likely continue to lean on the trendline with a defined risk below it to keep pushing into new highs. The sellers, on the other hand, will look for a break lower to pile in for a drop into the 58.80 support next.
CRUDE OIL TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can see more clearly the choppy price action with no clear levels where to lean on. From a risk management perspective, the buyers will have a better risk to reward setup around the trendline to position for a rally into new highs, while the sellers will need a break lower to open the door for new lows. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we conclude the week with the University of Michigan Consumer Sentiment data.
