After initial weakness following the US capture of Venezuelan President Maduro, crude oil prices have surged to new highs as market attention swiftly shifted from Venezuela to Iran.
The recent protests in Iran represent one of the most serious challenges to the Islamic Republic’s authority in decades. Triggered by a severe currency collapse where the rial fell to over 1.4 million per US dollar, and a sharp hike in fuel prices, the unrest has since broadened into widespread rejection of the Iranian leadership.
The Iranian government has labelled protesters as “terrorists” and “rioters” allegedly supported by the US and Israel. Meanwhile, President Trump has voiced support for the protesters and has considered potential military intervention. The US appears to be leveraging the protests to weaken Iran’s regime and pressure it into compliance with American demands. According to Trump and other officials, Iran has already initiated contact with the US to negotiate.
Yesterday, Trump announced on social media that any country trading with Iran would face a 25% tariff. Given the heightened risk of military escalation, crude oil prices have climbed as the geopolitical risk premium rises. Should a military intervention occur, prices could surge significantly, while positive negotiation outcomes would likely reverse the recent gains.
On a related note, the recent OPEC+ meeting concluded as expected, with the cartel agreeing to maintain output steady throughout the first quarter of 2026.
From the demand perspective, despite global monetary easing and improving economic conditions, the oil market remains under pressure, possibly due to increased production from OPEC+. However, bearish positioning is currently very stretched, suggesting the market could gain momentum later this year if economic activity strengthens further and OPEC+ continues to hold output steady.
Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, crude oil is breaking above the upper boundary of a falling channel, signalling growing buying interest. Traders have a defined risk level below the trendline and will be watching for a break above the 60.52 swing high to potentially target the 66.00 level next. Conversely, sellers may emerge near 60.52 to push prices back towards the 55.00 area.
Crude Oil Technical Analysis – 4 Hour Timeframe
The 4-hour chart shows strong support around 58.70. A pullback to this level could attract buyers who will place stops below this zone to target a rally towards 66.00. On the downside, sellers will aim for a break below this support to increase bearish bets targeting the 55.00 level.
Crude Oil Technical Analysis – 1 Hour Timeframe
On the 1-hour chart, a minor upward trendline is currently supporting bullish momentum. However, momentum appears to be weakening near 60.50, indicated by divergence with the RSI. A pullback to the trendline may see buyers defend the level to push prices higher, while a break below it alongside support would give sellers more conviction for further declines. Average daily range levels for today are marked by red lines.
Upcoming Catalysts
Key US economic data releases could influence market direction this week. Today, the US Consumer Price Index (CPI) report is due. Tomorrow brings the November US Retail Sales and Producer Price Index (PPI) reports, alongside a potential US Supreme Court decision concerning Trump’s tariffs. On Thursday, latest US Jobless Claims data will be released.
Original Source: Giuseppe Dellamotta of investinglive.com
