Oil prices in the spotlight as focus remains on US-Iran negotiations in Oman

Oil Market Developments

Oil prices are consolidating between key levels as traders await new developments in US-Iran negotiations. Prices surged on Wednesday after reports indicated that the US-Iran talks scheduled for today were canceled, but gains were erased when Iran's foreign minister stated the negotiations were still on. Given the low likelihood of a quick agreement, oil prices are expected to remain supported through the weekend amid rising military escalation risks. From a macro standpoint, OPEC+ held output steady as anticipated, continuing to support the market amid improved demand. Unless there are output hikes or market bets on Fed rate hikes, the outlook for oil prices remains skewed to the upside.

Technical Analysis

On the daily chart, crude oil is consolidating between the 66.44 and 62.37 levels. There isn’t much to glean from this timeframe, so a closer examination is needed. The 4-hour chart shows a bullish trendline, with buyers likely leaning on it to push prices to new highs, while sellers look for a break lower. In the 1-hour chart, choppy price action is evident, with no clear levels. From a risk management perspective, buyers will have a better risk-reward setup around the trendline to position for a rally into new highs.

Upcoming Catalysts

Today's focus will include the release of the University of Michigan Consumer Sentiment data.