FX.co ★ CL/Crude Oil

Crude oil traded below $76.00 per barrel at Friday's close, on track to record a roughly 10% weekly decline as expectations of a diplomatic resolution to the US-Iran conflict continued to limit any meaningful rebound in prices. Investors remain focused on the outcome of Iran-Oman talks regarding the potential reopening of the Strait of Hormuz, with any progress likely to ease supply concerns further. However, the situation remains far from settled. A report from Iran's state-run Fars News Agency indicated that Tehran is considering a plan that would ban US and Israeli ships from passing through the strategic waterway, while also imposing a 5% to 7% charge on the value of cargo for vessels using the route. That idea runs directly counter to the United States' long-standing position that sea lanes should remain free of tolls or restrictions. President Trump, for his part, expressed optimism that the conflict would end quickly, describing the strait as "somewhat open" and under US control, though he cautioned that Iranian forces could still "fire" or "drop mines." The mixed signals have kept traders on edge. Analysts at Rabobank weighed in on the supply picture, warning that global inventories are still being drawn down at a significant pace. The world is still consuming roughly 2 to 5 million barrels per day, depending on whether there are renewed calls for the release of strategic oil reserves, along with another 5 to 6 million barrels per day of refined products. They cautioned that "stocking this savings account will not last forever," highlighting the limitations of using stored crude and refined products to cushion ongoing supply disruptions. Looking further ahead, Rabobank's baseline scenario assumes that the recovery of crude oil flows will be a lengthy process. They project that through 2027, flows in the Strait of Hormuz may only return to 50% to 60% of pre-war levels, including rerouting to Yanbu and Fujairah. Meanwhile, Middle East refinery exports are not expected to return to normal until mid-2028.

Crude oil is currently trading at $77.10 at Friday's close, having pulled back from recent lows but still trading below several key moving averages, a sign that the bears remain in control. On the hourly chart, the 50-period SMA sits at $76.80 while the 200-period SMA is positioned significantly higher at $79.90, meaning price is trading roughly 30 pips above the 50 SMA but about 280 pips below the 200 SMA. That's a mixed signal on the short-term horizon; the fact that price has broken above the 50 SMA suggests some near-term momentum to the upside, but the 200 SMA at $79.90 looms large as a major resistance level. Stepping back to the four-hour chart, the outlook remains bearish. The 50 SMA sits at $79.90 while the 200 SMA is positioned slightly lower at $77.05, meaning price is trading just above the 200 SMA but well below the 50 SMA. That's a critical configuration: the 200 SMA at $77.05 is currently acting as support, while the 50 SMA at $79.90 is acting as resistance. The gap between the two H4 averages is about 285 pips and narrowing, suggesting that the broader trend is losing momentum and could be setting up for a decisive move. The fact that the H4 50 SMA is above the H4 200 SMA, a bearish crossover, confirms that the intermediate-term trend remains to the downside. Now let's look at the horizontal levels that exist independently of the moving averages. On the resistance side, the first hurdle is $78.00, a psychologically significant round number that has capped upside attempts in recent sessions. Above that, the next supply zone runs from $78.50 to $78.80, followed by a heavier barrier at $79.20. If buyers manage to clear all of that, the next targets are $79.80 and then $80.00. On the support side, the first floor is at $76.50, which aligns closely with the hourly 50 SMA, adding extra weight to this level. A break below that opens the door to $76.00, then $75.50, which aligns with the recent swing low and represents a key support from earlier in July. Further down, the next cushions are at $75.00 and then $74.50, which marks a deeper demand zone from late June.