Oil News: Crude Oil Slips as Traders Reassess Middle East Tensions and Demand Outlook

Oil Pulls Back After Rally Stalls Near Technical Resistance

Crude oil futures turned sharply lower Thursday, giving up earlier gains as traders took profits and reassessed risk ahead of critical geopolitical developments. West Texas Intermediate (WTI) spiked to $69.29 in early trading but reversed sharply, setting up a possible closing price reversal top—a technical warning sign that suggests a near-term pullback may be underway.

At 10:15 GMT, Light Crude Oil Futures are trading $67.11, down $1.04 or 1.53%.

Wednesday’s breakout above the 200-day moving average at $66.43 marked a bullish shift, turning that level into key support. However, the rally failed to challenge the April 2 peak of $71.17, stalling instead at resistance around $68.21. Traders may now look for a retest of the 200-day average as bulls regroup.

Middle East Risk Premium Fades as Traders Eye U.S.-Iran Talks

Prices initially climbed on Wednesday after reports confirmed the U.S. would partially evacuate diplomatic personnel from Iraq and Bahrain due to heightened regional tensions. President Trump emphasized the potential danger in the region, reaffirming U.S. opposition to Iran’s nuclear ambitions.

Yet by Thursday, the rally faded as traders weighed the possibility of de-escalation. The U.S. and Iran are scheduled to hold high-level talks on Sunday in Oman. U.S. Special Envoy Steve Witkoff will meet Iranian Foreign Minister Abbas Araghchi to discuss a potential deal on Iran’s nuclear activities.

Strait of Hormuz in Focus for OPEC Watchers

Oil traders remain focused on the Strait of Hormuz, a vital chokepoint for nearly 20% of global oil flows. Any disruption there could have a major supply impact. Global Risk Management analyst Arne Rasmussen warned that a closure would be a “nightmare” scenario for the oil market.

Britain’s maritime agency has issued cautionary guidance to vessels operating in the Gulf, Gulf of Oman, and the Strait of Hormuz, citing risk of military escalation. The situation is especially critical given Iraq’s role as the second-largest crude producer in OPEC.

Iranian Threats and U.N. Violation Add to Market Jitters

Iran’s Defense Minister has threatened to strike U.S. bases if talks fail, while President Trump continues to hint at possible military action. Meanwhile, the U.N. nuclear watchdog declared Iran in violation of non-proliferation rules, its first such ruling in nearly 20 years, raising the prospect of U.N. Security Council involvement.

Despite this, some traders believe the weekend talks may calm tensions. OANDA analyst Kelvin Wong noted that recent price gains hit key resistance levels, triggering some to book profits and reduce exposure.

Oil Prices Forecast: Bearish Near-Term as Market Lacks Catalyst

WTI briefly broke above $69, but the rally stalled and reversed sharply, signaling a potential short-term top. The lack of follow-through, combined with technical rejection near $68.21 and evident profit-taking, points to downside risk.

While the 200-day moving average around $66.43 now serves as key support, traders will be watching closely for headlines out of Sunday’s U.S.-Iran talks for direction. In the absence of a supply shock or a sustained breakout, the near-term oil prices forecast remains cautiously bearish.

More Information in our Economic Calendar.