Published: 29 January 2026,07:23
Daily Market Analysis New
*Crude prices climbed to their highest level since late September, supported by escalating geopolitical risks involving Iran.
*U.S.–Iran tensions intensified, with President Donald Trump warning of harsher military action if Tehran refuses nuclear talks.
*U.S. crude inventories fell sharply, defying expectations for a build and signaling near-term supply tightness.
Market Summary:
Crude oil prices surged to their highest levels since late September, driven by rising geopolitical tensions surrounding Iran and mounting signs of near-term supply tightness. Markets reacted sharply after U.S. President Donald Trump urged Tehran to return to negotiations over its nuclear program, warning that any future U.S. military action would be “far worse” if diplomacy failed. Iranian officials responded defiantly, saying the country would retaliate forcefully if attacked, reigniting concerns over potential disruptions to Middle Eastern oil supply.
Supply fundamentals further supported prices after U.S. government data revealed a larger-than-expected drawdown in crude inventories. The Energy Information Administration reported that U.S. crude stockpiles fell by 2.3 million barrels to 423.8 million barrels in the week ended January 23, sharply contrasting with market expectations for a 1.8 million-barrel increase. The surprise decline underscored tightening physical market conditions and added momentum to the rally.
Weather-related disruptions also played a significant role in lifting prices. Severe storms across parts of the United States over the weekend forced producers to shut in output, with analysts estimating losses of up to 2 million barrels per day—roughly 15% of total U.S. production. The disruptions strained energy infrastructure and power grids, exacerbating short-term supply constraints at a time when inventories were already drawing down.
Looking ahead, attention is turning to OPEC+, which is widely expected to maintain its pause on planned production increases when it meets on February 1. Several delegates indicated the alliance remains cautious about adding supply amid geopolitical uncertainty and uneven global demand. The prospect of continued output restraint, combined with geopolitical risks and weather-driven disruptions, has reinforced a bullish near-term outlook for crude, leaving prices highly sensitive to further developments on both the political and supply fronts.
Technical Analysis
Crude oil is trading higher after breaking above the previous resistance at 62.55, confirming a bullish continuation signal. Momentum indicators support the upside bias, with MACD showing strengthening bullish momentum and RSI at 70, holding above the midline and suggesting room for further gains. If bullish momentum persists, prices could extend higher to re-test resistance at 64.80, with 67.25 as the next upside objective.
However, if upside momentum begins to fade, crude oil may pull back to re-test the 62.55 support, which now acts as a key demand zone. A failure to hold above this level would signal a loss of bullish control and could expose deeper support at 60.75.
Resistance Levels: 64.80, 67.25
Support Levels: 62.55, 60.75
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