Oil prices decline amid oversupply worries as the US and Iran near a deal and US crude inventories increase

WTI oil prices dropped over 3% on Thursday morning as optimism faded following positive news on US-Iran nuclear talks, which could lead to easing sanctions on Iranian oil exports, and a sharp unexpected rise in US crude inventories, intensifying concerns about oversupply.

The sharp decline extended the pullback from the recent recovery peak at \$63.47, where prices repeatedly struggled to clear a key Fibonacci barrier at \$63.38 (50% of the \$71.98/\$54.77 drop) and remained just below the base of the descending daily cloud.

Fresh losses breached strong support at the \$60.29/\$60.00 zone (38.2% Fibonacci retracement of the \$55.14/\$63.47 recovery leg and a key psychological level, reinforced by the 10DMA). A clear break below this area would generate a fresh bearish signal, suggesting a deeper decline.

This bearish outlook is reinforced by strengthening negative momentum and a stochastic indicator emerging from the overbought zone. However, significant support in this region may slow the decline.

A brief consolidation above the \$60 level could precede another push lower, but caution is needed if prices rebound above \$61.50 (broken 23.6% Fibonacci level), which would weaken the bearish outlook and suggest a potential end to the corrective phase.

Traders will closely monitor further news on US-Iran negotiations for additional directional cues.

Res: 61.00; 61.50; 62.44; 63.00
Sup: 60.00; 59.30; 59.00; 58.32