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Published: 28 July 2026,03:36
Daily Market Analysis New
*Oil prices extended their decline as optimism over US-Iran diplomatic progress prompted investors to unwind the geopolitical risk premium built into crude prices.
*Improved supply conditions, including the resumption of Caspian Pipeline Consortium exports added further downward pressure on the energy market.
*Despite easing tensions, continued Houthi threats and below-normal shipping activity suggest geopolitical risks have not been fully eliminated.
Crude oil prices extended their sharp decline after the United States and Iran suspended military operations following nearly two weeks of escalating conflict, prompting traders to unwind a significant portion of the geopolitical risk premium that had driven Brent crude above $100 per barrel last week. WTI crude traded around $81–82 per barrel, while Brent fell toward the $87–88 region, marking one of the steepest multi-day declines this month as optimism grew that diplomatic efforts could prevent further disruptions to Middle East energy supplies.
The improvement in sentiment followed reports that Washington had paused military strikes since Friday while Iran signalled it would also suspend retaliatory attacks under mediation efforts involving Oman. President Donald Trump stated that the United States was engaged in “good talks” with Iran and suggested there was a realistic chance of reaching a diplomatic agreement, although he warned that military action could resume if negotiations collapsed. Despite the improving outlook, reports of fresh drone attacks and continued Houthi threats against regional shipping underscored that geopolitical risks have not completely disappeared.
Additional pressure on oil prices came from improving supply conditions outside the Middle East. Crude exports from the Caspian Pipeline Consortium terminal on Russia’s Black Sea coast resumed after previous disruptions, while analysts also cited slowing energy demand, particularly across Asia, as another factor weighing on prices. Although shipping volumes through the Strait of Hormuz remain significantly below normal levels, markets have become increasingly confident that a prolonged closure of the critical energy corridor is becoming less likely, reducing fears of severe global supply shortages.
Looking ahead, oil markets remain highly sensitive to both geopolitical developments and this week’s Federal Reserve meeting. If diplomacy between the United States and Iran continues to progress and shipping activity gradually normalises, crude prices could face further downside pressure as geopolitical premiums continue to unwind. However, any renewed military escalation, disruption to Strait of Hormuz energy flows or stronger-than-expected global demand could quickly reverse the recent sell-off, keeping volatility elevated in the near term.
Technical Analysis
Crude Oil, H4:
Crude oil has shifted into a short-term corrective phase after failing to sustain its breakout above the ascending trendline and the 87.60 resistance level. Following a strong rally from the 68.90 region, price formed a lower high near 92.50 before reversing sharply, breaking below the rising trendline that had supported the advance since early July. The decline has now extended toward the 78.05 support level, which represents the first key area where buyers may attempt to stabilize prices. A sustained hold above this support could trigger a technical rebound toward 87.60, while a decisive break below 78.05 would expose the next downside target near 68.90, signaling a deeper correction.
Momentum indicators have turned increasingly bearish. RSI has fallen to around 37, slipping well below its moving average and approaching oversold territory, reflecting a clear loss of bullish momentum. Meanwhile, MACD remains below the signal line with expanding negative histogram bars, indicating that selling pressure continues to strengthen and downside momentum remains in control. Although the market is nearing oversold conditions, there are currently few signs that bearish momentum has begun to fade. Overall, crude oil is undergoing a short-term correction after its strong July rally, with sellers firmly in control following the breakdown of trendline support.
Resistance Levels: 87.60, 95.80
Support Levels: 78.05, 68.90
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