Oil prices remain stubbornly high, and the ongoing US-Iran standoff is to blame. This tense situation is likely to persist until a significant breakthrough in negotiations occurs, or the Strait of Hormuz reopens, or war erupts once more. The latest developments, including US proposals for a temporary sanctions waiver and Trump's suspension of a large-scale military strike, have only added to the market's volatility. These headlines have kept oil prices in a tight range, with an unlimited ceasefire acting as a ceiling and minor escalations serving as a floor. An official resolution and the reopening of the Strait could push prices back to pre-war levels, but if the war resumes, oil prices may soar to new highs. The global economy's potential recession, driven by central bank tightening and equity market selloffs, could eventually lower oil prices, though they might not return to pre-war levels with the Strait closed.
The technical analysis of crude oil on different timeframes supports this narrative. On the daily chart, the price remains in a narrow range, with the 93.00 support and 110.00 handle acting as key levels. The 4-hour chart shows an upward trendline, indicating bullish momentum, while the 1-hour chart reveals the average daily range, which could influence short-term price movements.
Upcoming economic events, such as Fed Waller's speech and the FOMC meeting minutes, will continue to influence the market, but US-Iran headlines remain the primary catalyst for price movements. The market's sensitivity to these geopolitical tensions highlights the importance of staying informed about international relations and their potential impact on global markets.
