Crude oil price forecast
On the technical side
oil prices stabilized near their highest levels in seven months on Wednesday, amid investor fears that a military conflict between the United States and Iran could disrupt supplies, with talks between the two sides scheduled for Thursday, as the United States deploys its military forces in the Middle East to force Iran to negotiate an end to its nuclear and ballistic missile programs.
In his speech to Congress on Tuesday, US President Donald Trump gave a brief presentation justifying a possible attack on Iran, stressing that he would not allow the world's largest sponsor of terrorism to possess nuclear weapons.
US envoys Steve Wiggill and Jared Kushner are scheduled to meet with an Iranian delegation in Geneva on Thursday for a third round of talks.
Iranian Foreign Minister Abbas Araghchi said on Tuesday that an agreement with the US was possible, provided that diplomacy was given priority.
Amid rising tensions, Iran and China have intensified talks on the purchase of Chinese anti-ship cruise missiles, which could target US naval forces stationed near the Iranian coast.
Experts believe that anti-ship cruise missiles would enhance Iran's offensive capabilities and threaten US naval forces.
Although geopolitical tensions have supported prices, the market is also facing concerns about a significant increase in inventories as global supply exceeds demand.
Oil on a technical level
Brent crude completed the harmonic pattern on the hourly chart and is now attempting to form a head and shoulders pattern.
We are now waiting for a break of the neckline and the $70.27 per barrel level, after which we can cautiously sell oil to target the $69.40, then $68.60, and finally $67.50 per barrel levels.
From there, we can start building long positions on oil.
This scenario will fail if the price returns above the neckline and closes above $70.70 per barrel.
However, if the neckline is not broken and the right shoulder is broken upwards, crude oil is likely to continue its upward trend without corrections.
It is worth noting that oil movements will remain very sensitive to any new developments.
