Crude Oil Weekly Outlook: On the Edge of a Bullish Breakout

Author: Razan Hilal, CMT

Date: February 22, 2026

Overview

Crude oil prices are currently testing a breakout from a significant 2.5-year downtrend, influenced by rising tensions between the US and Iran. Additionally, the re-emergence of tariff risks associated with the Trump administration is posing threats to the broader market setup.

Key Events

• WTI and Brent crude are on the verge of a bullish breakout, supported by rotations into energy and defense sectors.
• US crude inventories have hit a six-month low, decreasing by 9 million barrels.
• The US Advance GDP has dropped to 1.4%.
• A Supreme Court ruling against Trump-era tariffs has led to a proposed 15% global tariff, raising concerns of renewed risk-off sentiment in the markets.

Market Analysis

Crude oil has maintained a bullish bias since December 2025, driven by winter demand and supply disruptions. The recent price rebound above $65 aligns with increased hedging activity in options markets and a shift in investor focus from technology sectors to energy and defense.

However, the looming risk-off sentiment and global tariff threats could limit crude's upward momentum as it approaches the upper boundary of a descending channel, marking a critical point for potential structural breakout.

Technical Levels

Key resistance is identified near $66.80. A breakout above this level could lead to targets at $68.40, $70.40, and $74, levels last observed during the June 2025 Middle East escalation. A weekly close above $74 would confirm a structural shift, potentially pushing prices towards $80 and reinforcing long-term bullish expectations.

Conversely, failure to maintain levels above $62 could re-establish bearish dominance, redirecting focus towards the $50 range, likely influenced by either a US-Iran truce or escalating tariff fears impacting growth expectations.

Market Sentiment

The energy sector is currently leading in a risk-off environment, with overall market sentiment remaining cautious. The CNN Fear & Greed Index indicates fear, with readings below 50, although there has been a slight improvement from earlier in the week. This sentiment, combined with elevated crude prices, is sustaining demand for safe-haven assets like gold and silver.

Conclusion

As crude oil prices test critical resistance levels amidst geopolitical tensions and tariff risks, market participants should remain vigilant. The potential for sharp reversals exists, and the interplay between bullish and bearish factors will be crucial in determining the future trajectory of crude oil prices.