Crude oil has resumed its upward trajectory, backed by strong technical momentum and reinforced by rising geopolitical risks. After shedding over 31% earlier in the year, prices have recovered decisively, with bullish chart patterns and moving average crossovers confirming the shift in market direction. At the same time, escalating tensions in the Middle East—particularly between Israel and Iran—are adding a fresh layer of volatility, raising concerns about potential supply disruptions. The following analysis outlines the key resistance and support levels, along with the broader market context traders should be watching.
Since declining from the January 15 high of $79.30 per barrel—shedding over 31% in value—crude oil has staged a notable reversal. This turnaround was triggered by a failure swing pattern, where the trough at $55.34 held above the previous low, followed by a breakout above the prior peak at $64.63, signaling the potential for continued upside.
The bullish outlook is further reinforced by the emergence of a “Golden Cross” crossover, as the 20-period Exponential Moving Average (EMA) crossed above the 50-period EMA—confirming a shift in trend direction. Supporting indicators remain constructive: the Momentum Oscillator stays above the 100 level, while the Relative Strength Index (RSI) holds firm above the 50 mark, both underscoring sustained bullish momentum.
Key Resistance Levels
If buyers maintain control of the market, traders may shift their focus to the following four potential resistance levels:
74.58: The first level of resistance is identified at 74.58, which aligns with the daily high marked on June 13.
79.30: The second price target is established at 79.30, representing the peak from January 15.
84.24: The third price target is established at 84.24.
94.69: An additional price objective is estimated at 94.69, mirroring the 423.6% Fibonacci Extension drawn from 64.63 to 55.34.
Key Support Levels
If sellers take control of the market, traders may focus on the following four key support levels:
64.63: The initial support level is seen at 64.63, representing the swing high from April 23.
62.92: The second support level is positioned at 62.92, aligning with the weekly Pivot Point, PP, estimated using the standard methodology.
59.30: The third downside target is noted at 59.30, corresponding to the low point marked on May 30.
54.67: An additional downside target is observed at 54.67, reflecting the swing low established on May 5.
Fundamentals
Global oil prices surged over 10% after Israel confirmed it had struck Iran, raising fears of a broader conflict in the Middle East that could disrupt vital oil supplies. Analysts warn that any escalation—especially if Iran retaliates—could impact the Strait of Hormuz, a key shipping route through which about 20% of the world’s oil flows. The spike in crude prices may lead to higher fuel and consumer costs globally. While some view this as an initial risk-driven market reaction, energy analysts caution that the situation could either de-escalate quickly or spiral into a major supply crisis.
For the week ending June 6, 2025, U.S. crude oil inventories fell by 3.6 million barrels to 432.4 million, 8% below the five-year average. Refinery runs increased to 17.2 million barrels per day, with utilization at 94.3%. Crude imports averaged 6.2 million barrels per day, down from the prior week and 13.3% lower year-over-year.
Conclusion
Crude oil’s recovery remains well-supported by both technical and fundamental drivers. With momentum indicators aligning to the upside and geopolitical risks injecting uncertainty into the supply outlook, the market appears poised for further gains—provided resistance levels are breached, and no sharp de-escalation occurs in the Middle East. However, traders should remain vigilant, as elevated volatility and key upcoming U.S. economic data could influence short-term sentiment and price direction.
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