Oil prices consolidate in early trading on Tuesday as talks about peace eased concerns about supply in the Middle East. Brent oil continues to trade near $115 while WTI oil consolidates near $101. Saudi Arabia, Turkey and Pakistan met Iranian officials in Tehran on Monday to discuss the conflict and de-escalate US-Iran war. The countries agreed to continue discussions about peace in the region and security. The hopes of progress in de-escalation of the conflict reduced fears of supply disruption and triggered correction in crude prices.
But the risk to Saudi security continues to cloud the movements in oil prices. The Saudi-led coalition said on Monday that it destroyed three drones that were targeting Riyadh and southern regions. The threat to energy facilities and shipping keeps the market cautious and keeps volatility high.
I think that the next move in oil prices may depend on the developments in the peace talks. Positive steps to improve safety in shipping may spur further selling in oil market as fears of supply may ease. But a confirmed disruption to production or exports could quickly lift Brent and WTI again. Further peace talks may provide some relief in the oil market but the risk of further attacks keeps prices vulnerable to sharp swings.
WTI Oil Price Forecast: A Break Above $106 Could Lead to $130
The strong surge in WTI oil in July, August, September and October has pushed the price toward the key resistance in the $106 region. This resistance is defined by the descending trend line that stretches from the highs of July 2008. A confirmed monthly close above the $106 level will likely open the way for strong rally towards the $125 to $130 area and then the $150 area.
The V-shaped recovery from the lows of July also supports a bullish outlook. Therefore, a break above $106 will likely confirm bullish outlook.
The daily chart for WTI oil also shows the formation of constructive price action in the form of an inverted head and shoulders pattern. These patterns formed in July and August. Then the rounding bottom pattern above the $87 area in September supports the bullish view. The price is now consolidating near the key resistance in the $104 to $106 area. A confirmed break above $106 will likely push the price further higher.
However, the RSI reached near overbought territory on Friday. This can suggest a correction before the next move higher. The strong support in WTI remains at $93 and $87.
Brent Oil Price Forecast
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See all Brent Oil forecastsBrent Oil Price Forecast: Break Above $120 Could Open the Way to $135
The daily chart for Brent crude oil shows that the price has been forming bullish price action above key support. The chart shows that the price has formed rounding bottom pattern in August 2026 and September 2026.
The price has already broken above $113 and pushed towards the $120 area. But the overbought conditions last week have triggered correction from this resistance zone.
The price now moves back to the $113 region in the short term. This correction does not change the bullish outlook in the oil market. A break above $120 will likely push Brent oil to higher levels.
The weekly chart for Brent oil also shows that the price has recovered from the strong support near the $70 region and formed V-shaped recovery pattern. The price turned positive above $100 and continues to attack $120. A break above $120 will likely continue the rally towards the $125-$135 area.
What to Watch Next
The oil market may remain volatile as traders watch for talks about peace and threats to supply. Any progress towards peace could ease the fears of supply and put pressure on prices. But further attacks on energy facilities and shipping may renew the buying interest. A confirmed break above $106 in WTI could open the way toward $125-$130. On the other hand, a break above $120 in Brent may push the price to $125-$135.