Crude oil forecast: Technical Tuesday | May 12, 2026

Crude oil has been finding solid support this week because of the stalled negotiations. Prices were up around 3% by mid-morning London trading, continuing to extend their gains from yesterday as traders are forced to price out prior optimism over a speedy resolution to the Strait of Hormuz situation. With the key waterway remaining effectively shut, and the two sides still far apart on key demands, a quick resolution is no longer likely and because of the resulting rally in oil, sentiment in other markets - especially those where the economy relies on oil imports - have taken a hit. Nothing else seems to matter right now, with traders solely focused on the economic implications of crude oil for the wider financial markets. Against this backdrop, the risks to our crude oil forecast remain tilted to the upside.

 

 

No deal in sight between the US and Iran

 

The US-Iran conflict has now dragged on for roughly two and a half months, and despite a fragile ceasefire that has been in place since April 8, there is still little indication that a lasting resolution is close. Yesterday, Trump said that the truce was effectively “on life support,” pointing to ongoing disagreements over Iran’s key demands. As long as the strait remains shut, the risks that we could see even higher oil prices are rising. That in turn is pressurising other markets, including bond prices, the euro and European stock markets. The key question is how far will the two side let oil prices to rise before having to make a compromise to end the stalemate. It looks like Iran is willing to take whatever economic hit it can take in order to secure a deal that this situation never rises again, but according to Trump those demands are simply not realistic. Something needs to give way and fast to change the tide. The prior optimism is fading fast.

 

Crude oil forecast: WTI technical analysis

 

Looking at WTI, you can see that in recent days it has been trying to form a base, with prices now climbing back towards the $100 per barrel level. The $97-$98 area is a very important zone for the market to keep an eye on. This was previously resistance and has now been taken out, meaning this area could turn into support on any near-term dips.

 

 

Below that level, we have $95 as the next area of support, followed by recent low near $93.60. Any move below that level would be seen as bearish from a short-term outlook perspective. For that scenario to play out, we would probably need some progress in the US-Iran situation.

 

On the upside, the next level of resistance comes in at $99, which was being tested at the time of this writing. Above $99, you have the psychologically important $100 per barrel level, which is going to be the next major level to watch.

 

A decisive break back above $100 could be significant, and we could then easily see oil prices eventually climb back towards the recent range highs. That would be something to watch out for because if oil prices were to reach those levels, we could see significant pressure on all risk assets.

 

Brent technical analysis

 

Looking at the Brent crude oil, prices were testing the $105-$106 area at the time of writing. This is the first area of potential resistance to watch. But with the recent breakout above several levels including the $100 zone, the path of least resistance continues to remain to the upside.

 

 

Above $105/$106 area, the next level of potential resistance comes in around $108, and then you have the $110 handle next, followed by range highs near the $113 to $115 area.

 

All told, the crude oil outlook remains bullish while the US-Iran stalemate continues, and the Strait of Hormuz remains shut. It is possible that that oil simply drifts higher and higher, eventually reaching $120. We could get there if the stalemate continues for another couple of weeks, because pressure in the physical market is building for prices to break higher.

 

 

 

 

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R