International oil prices fell in early Asian trading on Thursday, trading around $88 per barrel, mainly influenced by market expectations of easing tensions between the US and Iran. From a news perspective, both sides are considering extending the current ceasefire for about two weeks to allow more time to reach a long-term agreement. This significantly eased market concerns about oil supply disruptions.
The decline in oil prices reflects a temporary fading of market risk premiums, especially after the previous rapid rise in oil prices driven by geopolitical tensions, leading some long positions to take profits. Since the beginning of this week, we have accurately grasped this trend, adopting a bearish view on crude oil, and have achieved considerable success in the oil market.
We can see that oil prices are currently in a tug-of-war between “declining risk premiums” and “unresolved potential risks.” On the one hand, the expectation of negotiations weakens the logic of supply shocks; on the other hand, uncertainty in the Middle East situation remains, so market funds are generally in a cautious wait-and-see state.
From a technical perspective, oil prices on the daily chart are currently in a consolidation phase. After falling from their highs, a trend reversal has not yet formed. The current key level is around $95, which also serves as a crucial reference for the strength of the medium-term trend. If prices continue to trade below this level, it indicates weakening upward momentum. Key support lies around $82, a previous consolidation platform and a significant buying support level.
On the 4-hour chart, oil prices are in a downward channel. Short-term rebounds are limited, and the MACD indicator has formed a death cross and remains near the zero line, indicating weak market momentum. If prices cannot regain a foothold in the $92-$93 range, they will likely test the support area again in the short term.
In the short term, the progress of negotiations between the US and Iran will be the core variable driving oil price fluctuations, while fundamental factors such as inventory changes will play a more supporting role. If the negotiations make substantial progress, oil prices may further test key support areas; however, if the situation reverts, market risk premiums will quickly return, pushing oil prices back into a high-level consolidation range.
In summary, medium-term investors should pay close attention to the breakout of the $95 resistance and $82 support zone. Today, our short-term strategy remains focused on shorting crude oil, with particular attention to the resistance level of $89.3-$89.7. This area represents the high point of the previous day’s US session rebound, and I believe it still presents strong resistance.