FUNDAMENTAL
OVERVIEW
Oil prices have been
pulling back since Monday as the positive US-Iran deal expectations kept
weighing on the market. The second round of talks is expected to happen before
the April 22 ceasefire deadline. Trump mentioned today that they might have a
meeting this weekend.
In the meantime, we got
reports that US and Iranian negotiators made progress in talks on
Tuesday and they were moving closer to a framework agreement to end the war. A
US official has also mentioned that if a framework agreement is reached, the
ceasefire would need to be extended to negotiate the details of a comprehensive
deal.
Moreover, Reuters reported
yesterday that Iran could let ships sail freely through the Omani side of the
Strait of Hormuz without risk of attacks under the proposals it has offered
in talks with the US, providing a deal is secured to prevent renewed
conflict.
Everything now hinges on
US-Iran talks. If negotiations were to collapse again, we might see a
short-term rally in crude oil, but as long as the ceasefire holds, the upside
could remain limited. On the other hand, a peace deal is should increase the
bearish momentum and might take WTI oil back to pre-war levels.
CRUDE OIL
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that crude oil is now trading below the key 93.00 support zone which now
turned resistance. The breakout opened the door for a drop into the 78.00
support next. There’s not much more 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 rising channel and the 93.00 support zone amid
US-Iran deal optimism and that has turned the bias more bearish. If we get
another pullback into the 93.00 zone, we can expect the sellers to step in with
a defined risk above it to position for a drop into the 78.00 support
