Introduction
It is the start of the week, and time to look at crude oil again. There are some signs of de-escalation taking place in the Middle East & ceasefire discussions, which are causing some profit-taking to take place. That is why we have seen CL move from $98 on Monday last week to $88 now.
Structurally, crude is still holding up. The price recently bounced off the 50-day moving average, so let’s take a closer look at the technicals and what they are telling us.
When price first came down into the $86 – $87 zone zone, it tested, hovered, and only then started to push back up. There are still buyers in the market, but not enough to rally, just to hold the support level.
The market is driven mostly by the situation in the Middle East, and any new developments there will cause the market to move more than any technicals at this point. However, we can see some support levels forming and some structure taking place.
Key Levels That Matter
The levels themselves haven’t changed much, but the way price is interacting with them has.
The $87–90 zone is still the key support. It has now been tested multiple times, which gives it more importance—but also makes it more vulnerable if tested again.
Below that, the next real area sits closer to $81–83, around the 50-day. If price starts trading down there, the structure shifts from “pullback in trend” to something closer to a deeper correction.
On the upside, the market still has work to do. The $100–105 area is where momentum would need to return if this is going to turn back into a continuation move. And above that, the $110–115 highs remain the clear ceiling.
Middle East
There have been signs of de-escalation. Ceasefire discussions, less immediate threat to infrastructure, and no major follow-through on worst-case supply scenarios.
That doesn’t mean the situation is resolved. It just means the market is no longer pricing it as urgently.
And you can see that reflected in price. The rally added a lot of risk premium very quickly. What we’re seeing now is the market questioning how much of that premium actually belongs.
Scenarios
At this point, crude is balancing out and price discovery is setting in.
There’s still a path higher if this support continues to hold and buyers start stepping in more aggressively. But for that to happen, the market needs to show stronger momentum than it has so far.
There’s also a growing case for a broader range forming between roughly $88 and $105, especially if neither side can take control.
| Scenario | Description | Estimated Probability |
|---|---|---|
| Range | Price continues to hold between roughly $88 and $105 | 45% |
| Bullish Continuation | Support holds and CL pushes back toward $100+ and possibly the highs | 35% |
| Breakdown | $87–88 support fails and price rotates toward the low $80s | 20% |
Possible Trades
Longs make the most sense if crude continues to hold the $87–90 zone and starts showing stronger daily closes off that area. In that case, the trade is based on support doing its job, with upside back toward $100–105 first.
Breakout longs only become more attractive if price can reclaim $100–105 with momentum. Until then, buying strength too early risks chasing into a market that is still trying to stabilize.
Shorts become more interesting only if CL starts losing the $87–88 area cleanly. A break there would suggest the support zone is no longer being defended well enough, and that would open room toward the low $80s, where the next meaningful support likely comes into view.
Right now, the cleaner setups are probably the ones that come from reaction rather than prediction. Crude is still at a level where the market needs to prove whether this is support being defended, or support slowly giving way.
This analysis is for educational and informational purposes only and does not constitute trading advice. Futures and forex trading involve significant risk and may not be suitable for all investors. Always conduct your own research before making trading decisions.
