Oil Prices Drop to One-Week Low
Brent crude extended losses for a second straight session on Tuesday, dropping more than 3% as investors viewed the latest U.S. strategy of imposing sweeping sanctions on Iran as posing a lower risk to global oil supplies than a direct military escalation.
The decline accelerated from Monday’s peak of $94.81, pushing prices to a one-week low. The move generated an initial bearish signal after Brent slipped below the daily Ichimoku cloud, which is positioned between $91.41 and $82.33, and broke beneath the key psychological support at $90. Prices are now testing the pivotal Fibonacci support at $88.43, representing the 38.2% retracement of the $78.10 to $94.81 rally.
The daily technical outlook has weakened, with bullish momentum fading and prices falling below both the 10-day and 100-day moving averages. A sustained break below the $90 mark would strengthen the bearish case and open the door for deeper corrective losses.
However, geopolitical developments remain the dominant driver of price action. While the latest sanctions announcement may largely be viewed as a political measure rather than a direct threat to supply, support for crude prices may persist as shipping through the Strait of Hormuz remains heavily disrupted and strategic petroleum reserves across several Western economies have been significantly reduced. Unless there is a meaningful improvement in supply conditions or regional tensions ease substantially, the broader outlook for oil prices may remain tilted to the upside.
Res: 90.00; 90.87; 91.41; 92.87
Sup: 88.43; 88.00; 86.45; 85.85
