Oil prices climb on Middle East tensions, Houthi strikes on Saudi sites

Crude oil prices continue to push higher this week, building on earlier gains as the market quickly moved past the decline triggered by Trump's waiver on Russian sanctions. The primary factor remains the Middle East situation, where US-Iran talks have stalled and conflict between Saudi Arabia and the Houthis is keeping risk premiums elevated.

The Houthis announced on Wednesday they had carried out multiple attacks on Saudi energy infrastructure, airports and military installations. The conflict has escalated sharply in recent weeks and has been a key driver behind rising oil prices. A reduction in tensions would likely push crude lower and could wipe out the gains seen since October.

On the US-Iran front, a report from Al-Arabiya suggested a breakthrough in negotiations could be announced this week. Similar vague reports in the past have not materialised, so caution is warranted, though traders should be ready to adjust if a surprise deal emerges.

A breakthrough would almost certainly trigger a sharp selloff in crude, potentially sending prices back to pre-conflict levels. Conversely, a prolonged deadlock or renewed escalation would keep the market well supported.

Crude oil technical analysis – daily timeframe

On the daily chart, crude oil has broken above the 96.77 level, retested it, and extended gains to fresh highs as buyers targeted the 110.00 resistance. If the price reaches that area, sellers are expected to step in, with a defined risk above resistance, positioning for a move back to the lower end of the channel.

Crude oil technical analysis – 4 hour timeframe

On the 4-hour chart, a minor upward trendline is defining the bullish momentum. Buyers are likely to continue using the trendline as support, with risk defined below it, while sellers will look for a break lower to drive a deeper decline toward the channel's lower bound.

Crude oil technical analysis – 1 hour timeframe

On the 1-hour chart, buyers still have a favourable risk-reward setup around the trendline, while sellers need a break below both the trendline and the 96.77 level to target a deeper pullback. The red lines indicate the average daily range.

Upcoming catalysts

Thursday brings the latest US jobless claims figures, and Friday closes the week with flash US PMI data. The focus will remain on Middle East developments.