Introduction
Crude oil futures are pulling back slightly heading into the weekend as markets continue reacting to headlines surrounding possible progress in US-Iran negotiations. After rallying aggressively throughout March and April amid escalating tensions in the Middle East and disruptions in the Strait of Hormuz, buyers are pushing prices near the upper end of the range.
The current daily chart still shows a strong bullish structure overall, with CL futures continuing to trade well above both the 50-day and 200-day moving averages. However, short-term momentum has slowed as markets begin pricing in the possibility of easing geopolitical tensions between the United States and Iran. (The Wall Street Journal)
CL Futures Trend Analysis
Current technicals look like this:
- The 50-day moving average near 92.77 (Support off here in two recent tests)
- The 200-day moving average near 63.41
- Current price trading around 98.31
- Strong bullish structure with higher lows remaining intact
One of the most important technical developments on the chart is the repeated rejection near the $100–$105 resistance zone. Price has tested this area multiple times throughout April and May but has not yet managed to sustain a breakout above it.
At the same time, buyers continue stepping back in aggressively during pullbacks, helping maintain the bullish trend while price remains above the 50-day moving average.
Iran Talks Creating Weekend Risk Premium
Estimated Probabilities for Crude Oil Futures
| Scenario | Estimated Probability | Market Interpretation |
|---|---|---|
| Continued consolidation between $95 and $105 | 45% | Markets wait for further clarity on US-Iran negotiations |
| Bullish breakout above $105 | 35% | Geopolitical tensions re-escalate and buyers regain momentum |
| Pullback toward $92 support | 20% | Markets continue removing geopolitical risk premium |
Key Support and Resistance Levels
Major Resistance Levels
- $100
- $105
- $110
Major Support Levels
- $95
- $92.77 (50-day moving average)
- $85
Possible Trades
Bullish Continuation Trade
As long as CL remains above the 50-day moving average, the bullish structure remains intact, and we could continue seeing buyers step back into pullbacks. A strong breakout above the $100–$105 resistance zone would likely strengthen bullish momentum further, especially if geopolitical tensions begin escalating again or negotiations show signs of breaking down.
Pullback Trade Setup
The recent consolidation could also create pullback opportunities if buyers continue defending support near the 50-day moving average. Higher low formations, bullish rejection candles near support, and momentum recovering after periods of consolidation would continue supporting the bullish trend.
Bearish Rejection Trade
Although the primary structure remains bullish overall, we could continue monitoring for signs of exhaustion near resistance. If negotiations between the US and Iran continue progressing, markets may further remove geopolitical premium from crude oil prices, potentially triggering a deeper retracement toward lower support zones.
Final Thoughts
Crude oil futures remain in a strong bullish structure overall despite the recent pullback below the highs near $105. Momentum has slowed slightly as markets react to progress in US-Iran talks, but the broader trend remains bullish while price continues holding above key moving averages.
The $100–$105 region now remains the key technical battleground. A breakout above resistance could trigger another leg higher, while continued progress in diplomatic negotiations may keep pressure on oil prices in the near term. Heading into the weekend, volatility risks remain elevated as geopolitical headlines continue driving short-term price action across the energy markets.
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This analysis is provided for educational and informational purposes only and should not be considered financial or trading advice. Trading futures, forex, and other leveraged financial instruments carries a high level of risk and may not be suitable for all investors. Past performance is not indicative of future results. Before making any trading decisions, conduct your own research, assess your risk tolerance, and consult with a qualified financial advisor if necessary.
