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Published: 3 July 2026,06:17
Daily Market Analysis New
*Crude oil prices continue to fall as supply disruption fears ease
*Strait of Hormuz shipping flows improve as U.S.–Iran talks continue
*Contango in the prompt spread signals rising oversupply concerns
Crude oil prices continued to extend losses as fears of supply disruption eased further, with shipping flows through the Strait of Hormuz continuing to recover while negotiations between the United States and Iran remain ongoing.
The improving supply outlook has shifted market sentiment significantly. The prompt spread for the global oil benchmark has been in contango for much of the week, a market structure that often signals oversupply or weaker near-term demand. This has added further pressure on crude prices as traders reduce expectations of prolonged supply tightness.
Saudi Arabian crude exports have also surged to around 90% of their pre-war levels as more of the kingdom’s tankers successfully pass through the critical waterway. The rebound in Saudi flows mirrors the recovery seen in the United Arab Emirates, suggesting that regional energy exports are gradually normalising.
Diplomatic developments have further supported the bearish tone in oil markets. Recent talks between the United States and Iran in Doha appeared to progress smoothly, with President Donald Trump stating in an interview with CNBC that the United States is still negotiating with Iran and that Tehran has “agreed to just about everything” Washington needs.
The positive discussions in Qatar have raised hopes that the interim 60-day truce between both sides could eventually be converted into a lasting peace arrangement. As a result, markets are increasingly pricing in a scenario where energy flows through the Strait of Hormuz continue to recover, reducing the geopolitical risk premium that had previously supported oil prices.
At the same time, a build-up of Iranian oil at sea has increased expectations that additional supply could return to the market if sanctions are eased or export conditions improve. Combined with recovering Gulf exports, this has strengthened concerns that the market could shift from supply shortage fears toward oversupply risks.
Overall, crude oil’s near-term outlook remains pressured as Hormuz flows normalise, regional exports recover, and U.S.–Iran negotiations continue to progress. If oil flows remain stable and diplomatic momentum continues, crude prices may extend losses further in the near term.
Technical Analysis
Crude Oil, Daily:
Crude oil prices are trading lower, currently testing the 66.70 support level, which acts as a key near-term floor.
Market attention remains on a potential breakdown below 66.70. A confirmed break could extend losses toward the next support level at 57.00, reinforcing the bearish structure.
However, momentum indicators suggest that downside pressure may be easing. The MACD is showing diminishing bearish momentum, while the RSI at 29 has entered oversold territory, indicating the possibility of a short-term technical rebound.
If bearish momentum fails to persist, crude oil may recover and retest the 76.80 resistance level, followed by 86.90 if recovery momentum strengthens.
Resistance Levels: 76.80, 86.90
Support Levels: 66.70, 57.00
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