Crude oil declined in the previous session following reports that the United States and Iran are discussing a phased deal that would reopen the Strait of Hormuz and bring an end to the US blockade. The strait, which links the Persian Gulf to the Gulf of Oman, is one of the world's most important transit chokepoints for crude, which is why its status sits at the center of global oil supply expectations. According to the reports, Iran has put an offer on the table, pledging to reopen the Strait of Hormuz within seven days if the US meets its terms. Iranian Foreign Minister Araghchi is staying in New York over the weekend to await a US response.

The market commentary accompanying the reports noted that a breakthrough in negotiations would send oil prices quickly lower, while a prolonged stalemate or even a re-escalation would likely keep the market supported and drive prices toward new highs. It further observed that Trump is facing many constraints at the moment, making an end to the war more likely than not. The main open question, according to the analysis, is the timeline, and that has been what has been driving recent price action.

Daily Timeframe

On the daily chart, the analysis highlighted that crude oil (CFD contract) pulled back to the major 93.00 zone on renewed hopes for a US-Iran deal. Buyers were described as likely to pile in around these levels with a defined risk below the zone, positioning for a rally into the 110.00 resistance. Sellers, on the other hand, would look for short positions below the 93.00 zone to target a drop toward the lower bound of the channel around the 85.00 handle.

4-Hour Timeframe

On the 4-hour chart, price action around the 93.00 zone was expected to become choppier heading into the weekend due to gap risks, as geopolitical headlines can land while markets are shut and leave prices to adjust abruptly when trading resumes. As on the higher timeframe, buyers were seen as likely to step in around these levels to target new highs, while sellers would look for short positions below the zone to keep pushing the price into new lows.

1-Hour Timeframe

On the 1-hour chart, the analysis noted that the price broke below the minor upward trendline that had been defining bullish momentum. If the price pulls back to retest the trendline, sellers are expected to step in with a defined risk above the trendline, positioning for a drop into the 85.00 level. Buyers, on the other hand, would want to see the price rise back above the trendline to increase bullish bets the 110.00 level next. The red lines on the chart define the average daily range for today.

Upcoming Catalysts

There is nothing on the economic agenda today, but traders are expected to keep a close eye on US-Iran developments following yesterday's proposal to reopen the Strait of Hormuz under certain conditions. With markets closed over the weekend, any US response would not be priced in until the next open, leaving the news flow out of New York as the main focus into the new trading week.