Crude Slips as Iran Strike Fears Fade After Trump Says No Attack

Market Fundamentals

Traders had earlier added a geopolitical risk premium to crude after reports emerged of possible US strikes on Iran before the midterm elections. That premium is now being removed following yesterday's move toward de-escalation.

Trump wrote on Truth Social that Washington was in productive talks with Tehran and would not strike Iran ahead of the midterms.

The episode illustrates how markets function. Expectations are priced and repriced as new information arrives. Fears of retaliation and supply disruptions had lifted crude oil sharply during the escalation phase, but the softer tone reversed those bets and prompted traders to close out hedges and speculative longs.

Iranian Foreign Minister Araghchi said yesterday that Tehran was studying Washington's response to Iran's proposal and expected to respond in the coming days. Should the response be positive, oil prices would sell off sharply as supply prospects improve; a negative response, by contrast, would not alter much at this stage, although it would probably cap the downside in crude.

Crude Oil Technicals — Daily Chart

The crude oil CFD is retreating a bit after Trump's post eased tensions. Should the price fall all the way to the channel's lower bound, buyers are likely to re-enter with a defined risk beneath the channel, aiming once more at the 110.00 resistance. Sellers, in contrast, want a downside break so they can add positions for a move toward the 68.00 support, with 80.00 as the first target.

Crude Oil Technicals — 4-Hour Chart

The downward trendline's break opened the path for a climb to 96.77. If that level is reached, sellers are likely to step in with a defined risk above it, looking for a pullback to the lower edge of the channel. Buyers, meanwhile, are waiting for a break higher to raise their bullish exposure and attempt a push to the 110.00 resistance.

Crude Oil Technicals — 1-Hour Chart

After Trump's post, the price moved underneath the minor upward trendline as traders dismantled the earlier geopolitical premium. A further trendline near 89.50 could provide support. Buyers are likely to act around there too, managing risk below the channel's lower boundary, with the aim of driving price toward 96.77. Sellers, by contrast, need a break beneath the channel to open the way to fresh lows.

Catalysts Ahead

Today's University of Michigan Consumer Sentiment survey wraps up the week, though the release is not expected to move markets. Attention stays fixed on US-Iran developments.