Oil Falls Further As Trump Claims Talks Have Resumed
Crude Continues Lower
Crude prices are continuing to fall on Tuesday with the futures market now down around 14% from last week’s highs. The slide comes amidst rising optimism over the current cessation in hostilities between the US and Iran. Both sides have stepped back form fighting over the last 48 hours with Trump stating yesterday that talks between the two sides had already begun. Iran has so far denied that any direct negotiations are taking place but nonetheless, traders appear reassured by the pause in violence at least. Trump went on to say yesterday that he thinks “there’s a good chance” a deal can be made but went on to say that the US could equally resumed fighting with Iran if talks fail, and dismissed recent claims that US ammunition stockpiles are running low.
Headline Volatility
For now it seems that traders are happy to take crude prices lower and this dynamic should persist while the current ceasefire holds. Indeed, any further positive headlines, particularly if Iran confirms that talks have re-started, should see amplified selling of crude as optimism over a potential peace deal takes centre stage again. On the other and if talks breakdown and fighting resumes, crude should quickly move back through lats week’s highs turning focus bac to the $100 p/b level.
Technical Views
Crude
The rally in crude has stalled for now ahead of the 95.06 level with price since reversing sharpy back under the 84.60 level and back under the bear trend line from YTD highs. While below here, focus is on a continued decline with 77.65 the next support to watch ahead of the deeper 70.76 level.
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