Oil has long been recognized as a particularly volatile asset, prone to significant fluctuations as influenced by a myriad of global events and market dynamics. In recent weeks, this characteristic volatility has been on full display, exemplified by notable price movements that reflect the complex interplay of geopolitics, economic forecasts, and trading psychology.
Following a period of relative stability, during which prices oscillated between $60.5 and $64, the oil market was thrust into a state of heightened activity. Initiating this shift were the escalating tensions surrounding the US-Iran nuclear discussions, which precipitated a breakout in prices, elevating them to the $67 mark. This upward trajectory was further propelled by an aggressive maneuver by Israel, launching an attack on Iran. This act of aggression resulted in a substantial escalation, thrusting oil prices by an additional 15%, reaching the heights of $78.40 – levels last witnessed in January 2025.
Historically, the balance of global oil supply against the backdrop of economic activity has been a critical determinant of price trends. Of late, increased supply coupled with apprehensions regarding a deceleration in global economic growth had served to suppress prices. However, the geopolitical tensions that have recently unfolded, particularly in the Middle East, have drastically altered price dynamics.
In navigating the complexities of the oil market, several looming questions stand out. The aftermath of the Israel-Iran ceasefire has already seen a retraction in oil prices, but the sustainability of this ceasefire remains uncertain. Compounding this are questions regarding Iran’s future oil exports to China and potential new tensions within other oil-producing nations, such as the ongoing conflict between Ukraine and Russia. Additionally, the resilience of global economic activity amidst stagnant US trade negotiations presents another layer of complexity.
As market participants and observers alike ponder these questions, staying abreast of macroeconomic developments is crucial in anticipating shifts in oil market fundamentals. Alongside these broader economic considerations, technical analysis offers valuable insights into potential price movements and trading opportunities.
Technical Analysis of US Oil
Daily Chart Insights (As of June 26, 2025)
Examining the daily chart, we observe that oil has experienced a significant downtrend from the peak prices of $130 back in 2022. Nevertheless, the turmoil initiated by the Israel-Iran conflict on June 12th propelled prices to a stark high of $78.43. Despite this surge, a subsequent easing in hostilities facilitated a correction, with prices swiftly retreating to the $65 mark – signifying a 17% decrease over two trading sessions.
This correction, however, has not eradicated the potential for upward momentum. Price movements have since established a new bottom, aligning with the most recent lows and suggesting the formation of an ascending trendline.
Momentum indicators, which had previously indicated overbought conditions, now paint a more nuanced picture, transitioning towards neutrality. This shift suggests a balanced market outlook, poised between further gains and potential pullbacks.
Short-Term Forecasting with the 4-Hour Chart
A closer examination of the 4-hour chart reveals an immediate rebound following the Middle East de-escalation, with buying interest notable around the 200-period moving average—indicative of an intermediate low at $65. Concurrently, the Relative Strength Index (RSI) highlighted oversold conditions, revealing opportunities for bulls to initiate a push for higher prices. However, overcoming the immediate resistance posed by the 20-period moving average, currently at $67.20, remains a critical challenge for maintaining upward momentum.
Key Trading Levels
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Support Zones: Notable support is found at the $65 level, aided by confluence with the 4-hour MA 200. Additional support is identifiable at the high of the May range ($64) and a potential weekly descending channel support at $63.
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Resistance Zones: Near-term resistance looms at the 4-hour MA 20 ($67.20), with further hurdles at the $70 pivot zone. Intermediate resistance spans between $72 and $73, while the primary resistance zone is identified between $75 and $76.
In assessing the future trajectory of oil prices, traders and analysts alike must factor in the ongoing geopolitical landscape, global economic indicators, and technical price movements. As developments unfold, maintaining a vigilant eye on these factors will be paramount in navigating the inherently volatile oil market.
Engage responsibly and maintain a keen awareness of evolving market dynamics—wishing you successful and informed trading ventures ahead.
