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Published: 25 June 2026,06:35
Daily Market Analysis New
*The reopening of the Strait of Hormuz has significantly reduced fears of a global oil supply disruption.
*Oil prices have erased most of their wartime gains as tanker traffic returns to near-normal levels.
*Markets are pricing in a faster-than-expected return of Middle Eastern and potentially Iranian crude exports.
The fundamental outlook for oil has turned bearish as the market rapidly removes the geopolitical risk premium that was built during the U.S.-Iran conflict. The biggest driver is the reopening of the Strait of Hormuz, where tanker traffic has resumed much faster than expected. More than 20 million barrels of crude reportedly moved through the strait within 24 hours, while stranded tankers are now releasing additional supply into the global market. As a result, Brent crude has fallen back toward $73-74 and WTI toward $70, erasing most of the wartime gains.
Another bearish signal is the growing expectation of increased Middle Eastern supply. Traders are pricing in a faster return of Iranian exports, while physical crude cargoes from the Middle East and Africa are being offered at discounts due to abundant availability. Brent’s futures curve has also flipped into contango, where near-term contracts trade below later-dated contracts, indicating that the market sees ample short-term supply rather than a shortage.
What makes the recent decline even more significant is that oil continues to fall despite bullish inventory data. U.S. crude stockpiles recently dropped to their lowest level since 1984, yet traders largely ignored the report and focused instead on the improving supply outlook. At the same time, OPEC has lowered its global demand growth forecasts for 2026, reflecting concerns about slower economic growth and weaker fuel consumption.
Overall, the current fundamental picture favors lower oil prices unless geopolitical tensions flare up again. The combination of normalized Hormuz flows, returning Middle Eastern barrels, softer demand expectations, and abundant physical supply points to continued downside pressure. Lower oil prices are also disinflationary, which supports equities and risk assets while weighing on commodity-linked currencies such as the Canadian dollar and Norwegian krone.
Technical Analysis
Crude Oil, H4:
Crude oil remains firmly entrenched in a bearish trend with sellers maintaining control after breaking below the previous support zone around 72.40. The latest decline has pushed prices toward the 66.70 support level, reinforcing the broader sequence of lower highs and lower lows that has been in place since late April.
Recent price action shows a continuation of downside momentum, with the brief consolidation around 72.00–76.80 failing to generate a meaningful recovery. The subsequent breakdown confirms renewed selling pressure and suggests that market participants remain focused on downside risks. Price is now testing a key support area near 66.70, where buyers may attempt to stabilize the market.
Momentum indicators remain decisively bearish. RSI has fallen to around 25, entering oversold territory and reflecting strong downside momentum. While oversold conditions may increase the likelihood of a short-term technical rebound, they do not by themselves signal a trend reversal. Meanwhile, MACD remains below the zero line with the MACD line trading beneath the signal line, indicating that bearish momentum continues to dominate despite signs of slowing acceleration. Overall, the short-term outlook remains bearish as crude oil continues to trade near fresh multi-month lows with momentum indicators favoring sellers.
Resistance Levels: 76.80, 84.05
Support Levels: 66.70, 57.85
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