FX.co ★ CL/Crude Oil

Technical and Fundamental Analysis of the Crude Oil (CL) Oil prices surged at the start of the week as escalating tensions between the United States and Iran fueled concerns over a prolonged disruption to global energy supplies. Crude oil briefly climbed above the $84.00 mark during Monday's session before easing slightly to trade around $83.70, remaining close to its highest level in months. The latest rally comes as geopolitical risks continue to dominate market sentiment. The United States reportedly carried out military strikes inside Iran for a ninth consecutive day after another American soldier was killed in Iraq. The conflict has intensified rapidly, increasing fears that the confrontation could evolve into a broader regional war with serious implications for global oil exports. Adding to supply concerns, the Strait of Hormuz remains effectively blocked, creating uncertainty over one of the world's most important energy shipping routes. Around one-fifth of global oil shipments normally pass through the narrow waterway, making any disruption a major concern for energy markets. Reports from maritime authorities also indicated that a vessel caught fire near the coast of Oman, further highlighting the growing security risks across the region. Iran's Islamic Revolutionary Guard Corps (IRGC) has continued issuing strong warnings, stating that no oil shipments would be allowed through the Strait of Hormuz while military operations against Iran continue. Such developments have significantly increased the geopolitical risk premium built into crude oil prices, with traders becoming increasingly cautious about potential supply shortages. As a result, crude has recovered much of the decline recorded after the temporary ceasefire reached in May. Prices are now roughly 23% above the lows recorded in early July, although they still remain well below the March peak near $113.30. While demand expectations remain relatively stable, the current rally is being driven primarily by fears of tighter supply rather than changes in global consumption. Crude oil is trading around $82.00, maintaining a cautiously bullish outlook on both the H4 and H1 charts. Although the market remains volatile, the overall structure continues to favor buyers as long as prices remain above major support levels. On the H4 timeframe, a strong demand zone is located between $78.50 and $80.00. This area has repeatedly attracted buyers during previous pullbacks, producing higher lows and confirming that market participants are willing to accumulate positions at lower prices. The zone also aligns with previous swing lows, making it an important technical support area. On the upside, the primary H4 supply zone sits between $84.00 and $85.50. This region has rejected several bullish attempts in recent weeks and represents the next major barrier for buyers. A sustained move above this resistance would indicate renewed bullish momentum and could open the door for another leg higher. The moving averages continue to support the bullish outlook. The 20-period Simple Moving Average (SMA) is currently positioned around $81.50–$82.00, acting as immediate dynamic support, while the 50-period SMA remains lower near $80.00, reinforcing the broader demand zone. Since the 20 SMA remains above the 50 SMA, the prevailing trend still favors buyers unless prices fall below both indicators. Looking at the H1 timeframe, price action offers more detailed intraday levels. Immediate demand is located between $81.00 and $81.80, where buyers have consistently stepped in during recent declines. Bullish candlestick formations and repeated rebounds from this zone suggest that short-term buying interest remains intact. Meanwhile, the nearest H1 supply zone is found between $82.80 and $83.50. Sellers have repeatedly defended this region, preventing prices from extending higher during recent sessions. A successful breakout above this resistance would likely encourage fresh buying and shift focus toward the higher H4 resistance near $84.00–$85.50. However, the technical picture remains cautiously positive while crude oil holds above the $80.00–$81.00 support area. A decisive move above $83.50–$84.00 would strengthen bullish momentum and expose $85.50–$87.00 as the next upside targets. However, if prices break below the key support zone around $80.00, bearish pressure could increase, potentially driving crude oil back toward the $78.00–$79.00 region. Traders should continue monitoring price action around these major supply and demand zones, along with the 20 SMA and 50 SMA, for confirmation of the next directional move.