Oil Bouncing Back

Crude prices are stabilising today following a sharp drop lower yesterday in response to news that Trump has called a 5-day ceasefire for attacks on Iranian energy sites. Trump posted on X that the decision was taken on the back of two-days of talks with Iran aimed at delivering a broader peace deal. Crude futures plunged around 15% yesterday as the news broke. However, prices are bouncing back today Iran claiming that the talks did not take place and Trump is simply trying to backpedal out of the conflict.  

Headline Risks & Conflicting Signals

For now, the market is caught between conflicting signals. On the one hand, Trump’s 5-day ceasefire call alleviated near-term risks and if talks do take place and we get any news of broader negotiations and the chances of a proper ceasefire, crude has room to move sharply lower. However, with Iran and Israel continuing to exchange missile fire and Iran claiming no such dialogue has taken place with the US, the risks of the conflict continuing mean oil prices could easily push back up to highs, particularly if Trump eventually goes ahead with planned attacks on Iranian energy sites. For now, traders are very much in wait-and-see mode with plenty of news flow risk seen near-term.

Technical Views

Crude

The sell off yesterday found support into the 84.60 level with price since bouncing higher but still capped by the 95.06 level for now. Near-term, rangebound action between the two levels looks likely until we get a clear directional catalyst (clarity on the situation between the US and Iran). If we break lower, 77.65 will be next support to watch.