Oil Extends Decline on Emerging Signs of Improvement

WTI crude extended its pullback from Monday’s three-and-a-half-year peak at $119.44 on Tuesday, following a sharp and unexpected shift in market sentiment after President Donald Trump suggested that the war in the Middle East could end sooner than anticipated.

The US president also indicated that Washington may ease certain sanctions on Russian oil exports in an effort to partially offset potential supply shortages linked to the possible closure of the Strait of Hormuz, a critical shipping route that normally carries around 20% of global oil supplies each day.

Recent price action suggests that markets may have reacted excessively in both directions. The situation remains highly fragile, pointing to continued elevated volatility, while trading over the past two sessions appears to have been driven more by speculation than by concrete developments.

From this perspective, Trump’s signals regarding a potential end to the conflict and the possible easing of sanctions will likely require time to materialize, particularly as global markets have not yet experienced a significant physical disruption in oil supply.

Nevertheless, a cautious stance remains warranted. Many analysts continue to emphasize that the conflict is still ongoing and escalating, and any tangible impact on oil production or supply chains could quickly reintroduce strong upside risks for prices.

Res: 90.00; 91.41; 92.50; 95.40
Sup: 83.79; 82.81; 81.20; 80.00