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GEOPOLITICAL RISK LIFTS OIL, ENERGY STOCKS JOIN THE REBOUND

Oil prices are trading higher on Thursday as investors weigh the escalating tensions between the U.S. and Iran and what they could mean for efforts to bring the conflict to an end and fully reopen the Strait of Hormuz.

At last check, front-month NYMEX crude futures CLc1 were up about 0.6% on the day, holding just below the $74-a-barrel mark.

After filling an early-March weekly gap and touching a low of $67.04 last Friday, crude is trying to snap a four-week losing streak. Futures have gained more than 7% so far this week.

That said, the rally is running into resistance from several closely watched long-term moving averages.

The falling 200-week moving average (WMA) stands at $74.79, while the rising 40-week WMA — often viewed as a proxy for the 200-day moving average (DMA) — sits near $74.85. The 200-DMA is currently around $74.45.

On Wednesday, crude climbed as high as $76.08 intraday before pulling back and settling below these key technical levels.

If prices fall below last week's low, downside risks could re-emerge. In that scenario, the lower boundary of the weekly Ichimoku cloud, currently near $60.75, becomes the next area to watch. The April and December 2025 lows were $55.12 and $54.98, respectively, while the bottom of the monthly cloud sits near $45.

On the other hand, a weekly close above the longer-term moving averages would strengthen the case for a broader recovery. The next resistance levels come in at the June 22 high of $78.96 and the mid-April low of $80.56. Filling the mid-June weekly gap would require a move to roughly $83.20.

For a more convincing bullish signal, crude would need to break above the $86.75-$87.25 zone, which includes the upper edge of the monthly cloud.

Meanwhile, energy stocks are getting a lift from crude's rebound. With a strong positive 10-week rolling correlation between oil prices and the sector, energy shares have come back into favor after posting their steepest quarterly decline since the third quarter of 2020.

The S&P 500 Energy sector .SPNY is currently the top-performing S&P 500 .SPX sector both this week and this month, up 4.2% and 4.6%, respectively.

And despite recent volatility, energy remains the market's standout performer in 2026. The sector is up 23.4% year to date, far ahead of the S&P 500's 9.3% gain.

(Terence Gabriel)

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