FX.co ★ Helsinki | CL/Crude Oil

Crude oil prices extended their gains for a second consecutive session on Tuesday, trading near $86.60 a barrel as a fresh wave of hostilities in the Middle East reignited market fears of potential disruptions to regional energy flows. The escalation shattered a month-long lull after US forces struck Iranian rocket launchers on Larak Island, prompting Tehran to retaliate with attacks on targets in the UAE and Jordan. President Trump further raised the stakes by warning of possible military action on Khark Island, Iran's main oil export hub, adding a new layer of uncertainty to the already volatile region. The maritime risk was underscored when a supertanker caught fire after striking two naval mines in the Strait of Hormuz, a critical chokepoint for global oil shipments. Despite the heightened dangers, crude flows through the strait have not come to a complete standstill, with major Gulf producers, including Saudi Arabia, the UAE, Kuwait, and Iraq, continuing to move some of their cargoes. However, the pressure on global energy markets has intensified further as Russian refineries have been hit by drones and missiles, squeezing overall refining capacity. The decline in fuel processing capacity, combined with supply concerns in the Middle East, has pushed refined oil margins to fresh all-time highs, adding to the upward pressure on crude prices. BNY's Wee Khoon Chong noted that President Trump has injected new uncertainty into the energy market by announcing that the US has reached a deal with Venezuela that "ensures majority control over more than 65 billion barrels of oil reserves." Trump described the agreement as a "zero-cost" deal for US taxpayers, claiming it would strengthen bilateral ties while helping to lower gas prices. However, Chong observed that the absence of legal provisions and implementation details, in a context of already high energy costs and tighter global crude flows, has left investors skeptical about how and when any alleged benefits will reach the market.

Crude oil is currently trading near $86.60, holding comfortably above all key moving averages across both timeframes, a clear indication that bullish momentum remains intact. On the hourly chart, the 50-period moving average sits at $84.65, while the 200-period moving average is positioned at $84.40. Price is trading well above both averages, signaling that near-term momentum remains firmly in favor of buyers. The fact that price has held above these levels suggests that sellers have been unable to gain traction in the immediate timeframe, and any pullback toward these averages could attract fresh buying interest. The 50-period average is now acting as immediate support, while the 200-period average provides a deeper safety net beneath current levels. Stepping back to the four-hour chart, the 50-period moving average resides at $84.40, while the 200-period moving average rests lower at $83.00. Price is trading above both averages, a configuration that confirms the broader trend remains firmly to the upside. The widening separation between price and the moving averages suggests that the current rally has gathered significant momentum, though it also raises the possibility of a short-term consolidation or pullback to relieve overbought conditions. Turning to the horizontal levels that operate independently of the moving averages, immediate resistance is spotted at $87.20, marking the session's peak and a level that has repeatedly capped upside attempts. Above that, the next supply band stretches from $87.70 to $88.00, followed by a heavier barrier at $88.50. If buyers manage to push through these levels, the market could advance toward $89.00 and $89.50. On the downside, the first support floor sits at $85.80, a level that has provided a cushion during recent pullbacks. Losing that footing would open the door to $85.20, then $84.80, which aligns with the hourly moving averages and represents a key support zone. Further down, $84.30 and $83.80 represent deeper demand pockets, with the latter aligning with the four-hour 200-period moving average and offering a more substantial safety net. Looking ahead, if crude can hold above $85.80 and maintain its position above the moving averages, buyers may push the market toward $87.20 and beyond. However, if selling pressure intensifies and price breaks below $85.80, a deeper pullback toward $85.20 and $84.80 becomes increasingly likely. The broader uptrend remains intact as long as price holds above the four-hour 200-period moving average at $83.00, but near-term direction will depend on whether buyers can defend current support levels and how markets digest ongoing geopolitical developments.