Oil Nears $65 as Iran Deal Progress Shifts Supply Outlook

WTI crude oil fell over 1% to under $64 as diplomatic momentum between the US and Iran shifted supply expectations.

Over the weekend Iran’s Foreign Minister said both sides had agreed to draft a framework for a potential nuclear deal. The Trump administration also expressed optimism saying “very good progress” was being made. A third round of high level talks is scheduled for this Saturday in Oman.

The return of Iranian oil to the market has eased supply concerns and that’s why oil prices are pulling back. With sanctions relief on the table oil traders are recalibrating expectations especially as broader geopolitical risks remain high.

• WTI fell over 1%

• Iran-US talks could bring more supply online

• Next round of nuclear talks this Saturday

Geopolitical Risks Temper Optimism

While progress with Iran is good news the overall geopolitical landscape is still volatile. Hopes for a ceasefire between Russia and Ukraine were dashed as both sides accused each other of violating the 30 hour “Easter truce”. Ukraine is asking for an extension but Moscow is silent. These headlines are still injecting uncertainty into the market.

Adding to investor caution is the ongoing drag from US-China trade tensions which are weighing on global growth and energy demand. Traders are hesitant to commit in either direction as macro risks multiply.

• No extension on the Easter ceasefire in Ukraine

• Trade tensions still clouding demand forecasts

WTI Crude Oil Technical Setup: $61.65 Support Key

WTI is consolidating just below the critical resistance at $63.65—the 50% Fib from the March-April decline. The price is also testing the 50 period EMA at $62.00.

A close above $63.65 could take oil to $65.67. Below $61.65 which is the 38.2% Fib and an ascending trendline is key support. A break below this level could expose $59.15.

MACD is neutral with momentum fading so the market is waiting for a catalyst. For now traders should watch for a close above $63.65 or a pullback to $61.65 to define the next move.

Trade Setup

• Long: $61.65

• Short: $61.65

• SL: $62.00