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Published: 1 June 2026,04:02
Daily Market Analysis New
*Crude oil remains highly driven by developments surrounding the US-Iran ceasefire negotiations and the future reopening of the Strait of Hormuz.
*Earlier optimism over a potential diplomatic agreement triggered one of the sharpest monthly declines in oil prices as traders unwound geopolitical risk premiums.
*Recent reports of continued negotiations, renewed military activity involving Israel and Hezbollah, and concerns over mines near key shipping routes have revived supply disruption fears.
Crude oil remains the primary asset through which markets are expressing their views on the Middle East conflict. During May, oil experienced one of its sharpest declines in recent years as traders aggressively priced in the possibility of a lasting ceasefire between the United States and Iran. Expectations that the Strait of Hormuz could eventually reopen helped remove a significant portion of the geopolitical risk premium that had accumulated earlier in the conflict. As a result, both WTI and Brent recorded substantial monthly losses despite ongoing tensions across the region.
The situation became more complicated over the weekend as optimism surrounding a diplomatic breakthrough began to fade. Reports indicated that both Washington and Tehran were still negotiating amendments to the proposed agreement, while President Trump reportedly requested additional revisions before providing final approval. Meanwhile, military activity intensified elsewhere in the region after Israel ordered troops to expand operations in Lebanon against Hezbollah. These developments reignited concerns that broader regional instability could undermine efforts to achieve a comprehensive peace agreement.
Additional supply-side concerns have also emerged. Reports suggesting that mines may still be present within parts of the Strait of Hormuz have raised questions about how quickly normal shipping activity could resume even if an agreement is reached. Analysts have warned that reopening the waterway may prove far more complicated than markets initially anticipated. Since approximately one-fifth of global oil and LNG shipments normally pass through the Strait, any delays or disruptions could continue supporting oil prices despite progress in diplomatic negotiations.
Looking forward, oil is likely to remain the most sensitive market to geopolitical headlines. A successful ceasefire extension and gradual reopening of Hormuz would likely trigger another leg lower as risk premiums continue to unwind. However, any evidence of negotiation breakdowns, military escalation, or supply disruptions could quickly reverse sentiment and push prices sharply higher. This binary risk profile is likely to keep volatility elevated throughout the coming weeks.
Crude Oil, H4:
Crude oil is attempting to stabilize after finding support near the 84.40–90.40 region, with price rebounding modestly from recent lows. Recent price action suggests that WTI may be forming a short-term base following an extended decline, although the broader structure still reflects a series of lower highs and remains below key resistance levels.
Momentum indicators are beginning to show signs of improvement. The Relative Strength Index (RSI) has recovered back toward the midpoint level, indicating that bearish momentum is easing and that buying interest may be gradually returning. Meanwhile, the MACD has crossed higher from deeply negative territory, while the histogram has turned positive, reflecting improving short-term momentum after the recent selloff.
Despite this rebound attempt, crude oil continues to face strong overhead resistance near the 90.41 region, with additional resistance levels seen at 97.20 and 104.75. As long as price remains below these levels, the broader short-term outlook may continue to favor consolidation rather than a confirmed bullish reversal.Overall, crude oil appears to be entering a recovery phase after its recent decline, although stronger bullish confirmation is still needed before a broader trend reversal can be established.
Resistance Levels: 90.40, 97.20
Support Levels: 84.40, 79.50
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