Crude Oil Sellers Gain Control as Key Support Levels Tested

Crude oil prices are trading lower today, breaking below key technical levels as sellers take control. The fundamental outlook remains positive, with continued diplomacy between the US and Iran easing some geopolitical tensions. Qatar reported that talks are ongoing, and Iran described discussions with Qatar’s Emir as constructive, which has reduced the premium built into oil prices due to conflict fears.

Adding to the downward pressure, the G7 agreed last Friday to release 100 million barrels of crude oil and diesel from emergency reserves over four months. This supply release, along with assurances from Saudi Arabia about uninterrupted oil flows despite recent drone attacks, is helping to ease immediate supply concerns. US Energy Secretary Chris Wright noted that diesel prices may have already peaked, though he cautioned that risks remain in the Strait of Hormuz.

Technically, crude oil has broken below the $88.59 swing level and the rising trendline near $88.35, targeting the 50% midpoint support at $86.83. The price briefly dipped to $86.86 before recovering, setting up a potential battle between buyers and sellers. Buyers are now leaning against the $86.83 support, while sellers aim to push below it. If the price breaks below this level, the next targets would be the 100-day moving average at $86.04 and the 200-day moving average at $82.52.

For a recovery, buyers need to regain control by pushing back above the broken trendline and the $88.59 level. If successful, the next targets would be the falling 100-hour moving average at $90.47 and the 200-hour moving average at $91.64. For now, sellers have the upper hand, but the outcome hinges on whether the $86.83 support holds.