Crude oil wavers on conflicting US-Iran negotiation reports

Crude oil prices experienced sharp swings yesterday, driven by a mix of upbeat and contradictory news about the continuing US-Iran talks.

Al-Arabiya said Qatar and Pakistan had submitted a "compromise proposal" that met the conditions of both the U.S. and Iran. The plan also partly addressed Iran's demand regarding frozen assets.

Oil prices declined at first as hopes for a swift deal intensified, but reversed course after a diplomat involved in the US-Iran discussions stated that negotiations were still in progress and that accounts of a deal being imminent were incorrect.

Should a breakthrough occur, crude oil is expected to fall steeply on anticipation of greater energy supply through the Strait of Hormuz reopening. Conversely, a drawn-out impasse should keep prices supported.

Meanwhile, the Saudi-Houthi conflict continues. Attacks have escalated sharply of late and have significantly pushed oil prices higher in recent weeks. Iran stated yesterday it had not received any reply from Saudi Arabia or the Houthis regarding its offer to mediate an end to the hostilities. De-escalation on this front could also lower oil prices in the short term, possibly eliminating the gains of October.

Crude Oil Technical Analysis – Daily Timeframe

Crude oil (CFD contract) is consolidating above 96.77, as headlines about positive US-Iran talks cap the bullish momentum. Buyers are expected to continue accumulating near these levels, with a risk below 96.77, aiming for the 110.00 resistance. If the price reaches that resistance, sellers are likely to intervene, with a risk above the resistance, setting up for a decline back to the channel's lower bound.

Crude Oil Technical Analysis – 4 Hour Timeframe

A minor upward trendline defines the bullish momentum. Buyers will likely continue to rely on the trendline as support, with a risk below, to press into new highs. Sellers, in contrast, will watch for a downward break to extend the decline to the channel's lower bound.

Crude Oil Technical Analysis – 1 Hour Timeframe

Buyers continue to have a favorable risk-to-reward setup around the trendline, while sellers need a break below the trendline and 96.77 to target a deeper pullback to the channel's lower bound. The average daily range for today is a reference level.

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Thursday will see the latest US Jobless Claims numbers, and Friday will end the week with US Flash PMIs. The market focus stays on US-Iran negotiations.