Oil Falls On Rising Iran Peace Hopes
Oil Under Pressure
Oil prices are pushing lower again today reflecting renewed optimism over US/Iran peace hopes. While there has been no new news in the last 24hrs it seems traders are simply relieved that a fresh spate of attacks from both countries didn’t escalate further and that the ceasefire remains intact. Overnight on Monday, the US attacked Iranian launch sites and mine laying boats in the Strait of Hormuz with IRGC retaliating by firing at US drones. There was some initial fear that the ceasefire was at risk of collapsing, leading to the spike in oil prices we saw off the lows yesterday. However, with both sides refraining from any further attacks, sentiment has rebounded today and oil prices are falling once again accordingly.
Peace Hopes Rising
Over the weekend, Trump signalled that negotiations had entered their final stages and he expected a deal soon. While we have yet to hear an official response from Iran on the latest US peace proposal, price action suggests traders believe a deal is getting closer. If we hear any positive news in coming days (either that Iran accepts the proposal or is willing to compromise and work towards a deal), this should see oil prices falling further as traders eye an end to the supply constraints which have gripped the market in recent months.
Technical Views
Crude
The sell off in crude has seen the market falling below the 95.06 level with price now fast approaching a test of the 84.60 level and the triangle lows. Bulls need to defend this area to prevent a deeper drop down towards 77.65 next. If we spike back above 95.06 near-term, 101.69 will be the next bull target to note.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% and 74% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.