
WTI and Brent crude surge after Iran halts talks with the U.S. President Trump claims a ceasefire, yet Israel and Hezbollah have not confirmed. Natural gas drops
Crude oil futures surged on Monday after reports that Iran had halted negotiations with the United States, reviving fears of supply disruption through the Strait of Hormuz. WTI crude rallied toward the $91.00–$91.50 resistance zone, while Brent crude pushed above $96.00 as traders priced in a higher probability of escalation between Iran and Israel.
The move comes despite President Trump's claim that Israel and Hezbollah had agreed to a ceasefire. Neither side confirmed the truce, and traders demanded additional confirmation before accepting the risk-off narrative. The conflicting signals from the negotiating table have left oil markets in a familiar pattern: rallying on headlines, pausing on denials.
Reports indicated that Iran will suspend talks with the U.S. until Israel stops its operation against Hezbollah in Lebanon. Iran views Hezbollah as its key regional asset, and any ceasefire between Israel and the militant group would increase the odds of a successful U.S.–Iran deal. Without that ceasefire, the negotiation path narrows.
President Trump said he spoke with Israeli Prime Minister Benjamin Netanyahu and people from Hezbollah. He added that talks with Iran were continuing at a rapid pace and that Iran had not told him it was suspending negotiations. The conflicting pictures from the sides are normal for challenging negotiations, yet oil markets have started to price in the potential for escalation.
The key transmission mechanism runs through the Strait of Hormuz, through which about 20% of global oil passes. A breakdown in U.S.–Iran talks removes the most likely diplomatic off-ramp for tensions in the region. If Israel continues its operation against Hezbollah, Iran may retaliate through proxies or directly threaten the strait.
WTI crude is trying to settle above the $91.00–$91.50 resistance zone. A successful break would open the path toward the next resistance at $97.00–$97.50. The move higher has been driven by short-covering as much as fresh buying, which makes the rally vulnerable to a sharp reversal if ceasefire confirmation emerges.
On the downside, a failure to hold above $91.00 would send WTI back toward the $87.00–$88.00 support range. The 50-day moving average sits near $85.50 and would act as a floor in a risk-off unwind.
Most of today's upside momentum in WTI came from short-covering, according to positioning data. Traders who had built bearish bets on expectations of a diplomatic resolution were forced to cover as the Iran talks collapsed. This dynamic amplifies the move in both directions: a ceasefire confirmation would trigger a violent squeeze higher in the opposite direction.
Brent crude gained strong upside momentum, settling above the $96.00–$96.50 resistance zone. The next target is the psychologically important $100.00 level. A move above that would push Brent toward the 50-day moving average at $103.33.
The $100 level is not just psychological; it is a trigger for algorithmic trading systems and options gamma. A break above $100 would likely accelerate the move as stop-losses and delta hedging kick in.
On the support side, a move below $94.00 would push Brent toward the $91.00–$91.50 range. That level represents the pre-escalation price before the Iran talks collapsed.
President Trump said that Israel and Hezbollah agreed to stop attacking each other. Neither side confirmed the truce. This is the central ambiguity for oil traders. If a ceasefire is confirmed, Brent could drop back to $91.00 or lower. If negotiations remain stalled, Brent will test $100 and potentially break above it.
Natural gas is under strong pressure as traders focus on bearish changes in weather forecasts. Comfortable weather will lead to low demand, removing the primary bullish catalyst that had driven prices higher in recent weeks.
Natural gas is trying to settle below the $3.20–$3.25 support level. A successful break would send prices toward the next support at $3.00–$3.05. On the upside, natural gas needs to settle back above $3.25 to regain momentum. A move above that level would push prices toward recent highs near $3.40, with the next resistance at $3.50–$3.55.
The demand for natural gas is highly sensitive to temperature deviations. Mild weather reduces heating demand, which is the primary driver of consumption in the shoulder season. The current weather forecasts show above-average temperatures across key demand regions, crushing the speculative long positioning that had built up over the past month.
The U.S. Dollar Index rebounded amid rising tensions in the Middle East, as safe-haven flows returned. The dollar's strength is a headwind for commodities priced in dollars, including oil and gold. The oil rally has so far overwhelmed the dollar drag, as supply fears dominate the pricing mechanism.
EUR/USD fell as the dollar strengthened, testing the 1.0800 support level. GBP/USD also declined, though the pound has shown relative resilience compared to the euro. USD/JPY rose as the yen weakened on risk-off flows, with the pair testing 150.00.
The dollar's safe-haven bid is likely to persist as long as the Middle East situation remains unresolved. A ceasefire confirmation would reverse the dollar rally and provide a tailwind for risk assets.
The next catalyst for oil markets is confirmation of the Israel–Hezbollah ceasefire from both sides. If confirmed, oil prices will likely drop sharply as the risk premium unwinds. If negotiations remain stalled or escalate, oil will test the $100 level in Brent and $97.50 in WTI.
Traders should also watch for the weekly EIA inventory data on Wednesday, which will provide a fundamental check on the supply-demand balance. A large drawdown would reinforce the bullish case, while a build would suggest that demand is weakening despite the geopolitical premium.
For natural gas, the next catalyst is the updated weather forecast. If the forecasts turn colder, natural gas could stage a recovery rally. If the mild weather persists, the $3.00 support will be tested.
For related analysis, see our forex market analysis for the dollar's impact on commodities, and our weekly COT data for positioning insights on oil and natural gas.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.