Crude oil prices drop as bears take charge, driven by easing concerns over conflict escalation

WTI oil prices fell to their lowest level in nearly four weeks early Monday, following a brief surge on Friday triggered by Israel’s attack on Iran.

The mood quickly turned negative as concerns about conflict escalation eased, and traders refocused on fundamentals. A rise in US crude inventories fueled demand worries and weighed on oil prices, alongside a stronger dollar due to diminished expectations of a Federal Reserve rate cut.

Bears challenged the critical Fibonacci support level at $81.42 (38.2% of the $71.40/$87.61 rally) but must achieve a daily close below this point to confirm a bearish signal.

Increasing downward momentum on the daily chart and a double bear-cross (10/20-day and 5/30-day moving averages) exert pressure on near-term action. A sustained break of the $81.42 trigger would pave the way for a test of the next key support levels at $80.00/$79.80 (psychological/200-day moving average) and $79.50 (50% retracement).

The breached 30-day moving average at $82.94 should ideally limit upward movement and maintain bearish momentum. However, a rally and close above the $84.00/$84.20 zone (round figure/converged 10/20-day moving averages) would counteract the near-term bearish outlook.

Res: 82.53; 82.94; 83.78; 84.20

Sup: 81.42; 80.70; 80.00; 79.50