Oil prices are down almost 3% today after Donald Trump reportedly called off a strike on Iran at the last minute and suggested the US may hold back from launching an attack. Brent crude (OIL) is sliding nearly 3% and has fallen below $64 per barrel, giving back part of the recent rebound.
- The move reflects a drop in geopolitical risk: Trump said he had received information indicating that the killing of protesters in Iran would stop, reducing the likelihood of a rapid military escalation.
- Earlier, the market had been positioning for escalation. There were signs that US strikes could be imminent, and Iran temporarily closed its airspace. Investors have now started to unwind the risk premium embedded in oil prices. Recent gains in crude had been driven mainly by Iran-related tensions, unrest in Venezuela, and disruptions to Kazakhstan’s exports via the Black Sea (drones, maintenance, and adverse weather).
- Volatility has also been amplified by financial flows in the options market: heavy bullish options activity has intensified price swings in both directions. Another bearish factor came from the US: EIA data showed crude inventories rising more than expected, further weighing on sentiment. The market is also factoring in Venezuelan supply dynamics and growing US fuel inventories, which limit upside potential.
OIL (H1)
The decline in oil prices is currently finding support at the 200-period EMA on the hourly chart, around $63.5 per barrel. Selling volume has dominated since the overnight hours. It’s also worth noting that a strike scenario is still possible—although as recently as yesterday, the market had been treating it as almost “inevitable.”
Source: xStation5
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