Everything indicates that today’s negotiations between the US and Iran could represent the last opportunity for a diplomatic breakthrough. Large US and allied forces are reportedly on standby and ready to act if diplomatic efforts fail. In the event of a military solution, oil prices could continue the upward trend that began in January and move above the $70 per barrel level. Somewhat overshadowed by the risk of war, another + meeting is scheduled for this Sunday. It could mark the end of the pause in production increases and result in an output hike of 137,000 barrels per day starting in April. In a scenario where Washington and Tehran reach an agreement and sanctions are eased, WTI prices could return to a downward trend, with the potential to break below the lows seen around the turn of 2025 and 2026.
WTI Prices in a Wait-And-See Mode
At the start of the new week, WTI crude reached fresh highs for the year, slightly above $67 per barrel, before entering a phase of consolidation. The current sideways movement reflects uncertainty surrounding developments in Iran, where the prospect of US and allied military intervention remains unresolved. For years, the core issue in the dispute has been Iran’s nuclear program, which the US administration claims is aimed at acquiring nuclear weapons. A key question is how effective any potential strike would be in deterring Tehran, especially given that last year’s airstrike did not ultimately lead to the abandonment of its nuclear ambitions.
What could the US offer Iran in return? In this context, the incentive could be sanctions relief. Although sanctions were extended yesterday to 30 entities involved in transporting Iranian oil, from a technical standpoint their easing would not be difficult to implement. A crucial element of the broader picture will be Iran’s allies, particularly China, whose response could influence the course of the conflict and, consequently, market reactions.
Will OPEC+ Increase Production?
This Sunday, the OPEC+ group will hold another regular meeting, where one of the key issues on the agenda will be production limits. It is worth recalling that production increases have been paused for three months. That pause could end this week, although this remains uncertain. Saudi Arabia, a US ally, may support such a move, which could also maintain pressure on Russia through lower global oil prices. Given these developments, the coming days appear critical for determining price direction in the short and medium term.
The Market Awaits a Decision – WTI Oil Analysis
The upward trend observed over the past week culminated in a new yearly high, followed by a pause in the form of local consolidation. If sellers manage to extend the correction, the nearest target zone lies at the confluence of the ascending trend line and local support around $64 per barrel.
In the absence of a decisive resolution, a deeper sell-off could follow, with an initial downside target near $62 per barrel.
****
Below are the key ways an InvestingPro subscription can enhance your stock market investing performance:
- ProPicks AI: AI-managed stock picks every month, with several picks that have already taken off this month and in the long term.
- Warren AI: Investing.com’s AI tool provides real-time market insights, advanced chart analysis, and personalized trading data to help traders make quick, data-driven decisions.
- Fair Value: This feature aggregates 17 institutional-grade valuation models to cut through the noise and show you which stocks are overhyped, undervalued, or fairly priced.
-
1,200+ Financial Metrics at Your Fingertips: From debt ratios and profitability to analyst earnings revisions, you’ll have everything professional investors use to analyze stocks in one clean dashboard.
-
Institutional-Grade News & Market Insights: Stay ahead of market moves with exclusive headlines and data-driven analysis.
-
A Distraction-Free Research Experience: No pop-ups. No clutter. No ads. Just streamlined tools built for smart decision-making.
Not a Pro member yet?
Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belong to the investor. We also do not provide any investment advisory services.
