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Oil Prices Slide as U.S.–Iran Deal Optimism Boosts Risk Appetite

Published: 7 May 2026,06:02

Daily Market Analysis New

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Key Takeaways

*Oil prices tumble nearly 8% on renewed U.S.–Iran peace deal optimism

*Proposed framework includes gradual reopening of Strait of Hormuz

*Global risk appetite improves as geopolitical tensions soften

Market Summary

Global risk appetite improved significantly while crude oil prices extended their losses, as optimism surrounding a potential U.S.–Iran agreement became the dominant market catalyst.

According to Bloomberg, the United States and Iran are discussing a fresh proposal aimed at ending the conflict that has disrupted global energy markets and clouded the economic outlook in recent months. Donald Trump is reportedly seeking a pathway to de-escalation after prolonged tensions drove energy prices sharply higher.

Under the proposed framework, Washington has presented a one-page memorandum of understanding that would gradually reopen the Strait of Hormuz and ease the U.S. blockade on Iranian ports. The proposal focuses initially on stabilizing energy flows and reducing military tensions, while more detailed negotiations surrounding Iran’s nuclear program would be postponed to a later stage.

Although no agreement has been finalized, the latest developments have improved market sentiment considerably. Iran is expected to respond to the proposal through Pakistan within the next two days, though Iranian state media has suggested that certain aspects of the framework may still be viewed as unrealistic by Tehran’s leadership.

With markets increasingly pricing in the possibility of a diplomatic resolution, fears surrounding prolonged supply disruption have eased sharply. As a result, crude oil prices slid nearly 8%, reflecting a rapid unwinding of the geopolitical risk premium that had previously supported prices.

Overall, the latest developments have shifted market focus toward the possibility of normalized energy flows and reduced geopolitical tensions, supporting broader risk appetite while weighing heavily on oil prices in the near term.

Technical Analysis

image – PU Prime | More Than Trading — image

CL-Oil, H4:

Crude oil prices are trading lower, currently consolidating around the 92.00 support level, which serves as a key near-term floor.

A confirmed breakdown below 92.00 could extend losses toward the next support at 85.90, signaling continuation of the broader corrective move.

However, momentum indicators suggest downside pressure may be easing. The MACD shows diminishing bearish momentum, while the RSI at 37 is rebounding from oversold territory, indicating potential for a short-term technical rebound.

If buying interest returns, prices may retest the 99.50 Fibonacci retracement resistance level, with further upside toward 105.60 if recovery strengthens.

Resistance Levels: 99.50, 105.60
Support Levels: 92.00, 85.90

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