Renewed US-Iran deal talks cap crude oil even as upside risks linger

Oil is consolidating near its weekly peaks, with renewed hopes for a US-Iran pact limiting further gains. Shortly before this, a Semafor report said the Trump administration is engaged in talks aimed at reaching a temporary peace agreement with Iran. Vice President JD Vance has reportedly sent a letter to Tehran to try and restart negotiations.

A US official told Semafor that American troops could resume combat soon after the midterm elections, with the military said to need only the president's permission. However, several officials remain sceptical about escalating the conflict, while Trump is reported to be the most inclined towards military action, though he still has hesitations.

Meanwhile, the ongoing Saudi-Houthi conflict adds to the upside risks. In summary, the market is supported by the Middle East tensions and the prospect of another US attack after the midterms. A significant price correction would need a de-escalation in the Saudi-Houthi conflict or a surprising development in US-Iran talks.

Crude oil technical analysis – daily timeframe.

Crude oil (CFD contract) has been consolidating near recent highs for about a week as the push for a US-Iran deal has intensified. The crucial technical parameters from this daily view are the channel's lower bound and the resistance zone near 110.00; a more granular timeframe offers additional detail.

Crude oil technical analysis – 4-hour timeframe.

An upward trendline defines the bullish momentum. Buyers continue to rely on this trendline, with a defined risk below it, to push into new highs. Sellers, on the other hand, want to see the price break lower to pile in for a correction down to the channel's lower bound.

Crude oil technical analysis – 1-hour timeframe.

Price volatility could lead to many false signals. Buyers have a better risk-reward setup around the trendline, while sellers need a break below it to open the way for new lows.

Upcoming catalysts.

The US GDP report, PCE data and the latest US Jobless Claims figures are due today. The week ends tomorrow with the US Employment Cost Index. The focus will remain on Middle East developments.