Insights 
VT 
Crude oil prices quickly reversed all recent gains after Iran’s retaliation, which the market viewed as largely symbolic. This led to a swift selloff, driven by expectations of a de-escalation that have been ongoing.
The focus now shifts to global growth prospects, supported by factors such as anticipated Federal Reserve rate cuts and improved trade relations. These elements are conducive to increased demand in the oil market.
Oil Price Fluctuations
In broader terms, oil prices may fluctuate between 60 and 90, with potential for upward movement. On the daily chart, a drop below the 72.00 mark led to further selling, targeting the 65.00 support level.
At the 65.00 support, buying interest re-emerged, suggesting a possible rally towards 80.00. If prices fall below 65.00, a further decline to 55.00 could occur. The 1-hour chart indicates a slowdown in bearish momentum at the support zone.
Here, sellers may reduce their positions, and buyers could enter the market. Stability around this level might ensue following recent volatility, making it an essential focus for market participants.
What we’ve seen so far is a swift unwinding of risk premiums that were priced in on the back of regional flare-ups. The recent gesture out of Tehran, having been appraised as mostly rhetorical, appears to have defused short-term fears, allowing crude markets to breathe and retrace sharply. From a trading stance, this shift proved responsive rather than overdone, aligning with broader sentiment toward reduced geopolitical shock potential in the near term.
Demand Side Dynamics
With that narrative played out for now, attention has naturally turned back to demand-side dynamics. Lynch’s earlier observations regarding macro factors help establish a baseline outlook—monetary easing, coupled with warmer diplomatic ties among major economies, suggests a gentler breeze for global activity. All of this filters downstream into commodity markets via improved consumption forecasts. The currency-adjusted outlook for energy-importing countries, in particular, is moderately improved, which might underpin firmness in oil buying in Q2.
From our reading of price action, the current range offers structure. There’s clear memory at those broader bands postulated earlier. More recently, the rejection below 72 was met with heavy downside pressure. Momentum accelerators kicked in fast once support failed, and the market quickly found itself testing the next pronounced foothold around 65.
It was around 65 that the order flow showed a different character. The high volume responses there, paired with a noticeable decay in selling pressure across shorter timeframes, hint that active liquidation is slowing. In fact, if one drills into intraday candles, particularly those around the European open, wicks began elongating to the downside—suggesting that sellers weren’t getting the extension they needed. These types of reactions are often precursors to tighter balance zones.
From a strategy viewpoint, intervals around this floor may present setups worth exploring, albeit with sharp adherence to risk controls. If softness persists above here without further liquidation, short-term mean reversions become more attractive. Working from the hourly patterns, the slope of the RSI and volume-weighted averages are no longer aligning with heavier downward flow, and that typically affords tactical long exposures, provided that execution aligns with support pivots.
Should, however, this level fail—and we define that here with two daily closes materially below 65—then 59–55 becomes activated as destination zones, both structurally and psychologically. At that point, models should be recalibrated for volatility expansion, particularly with options positioning already leaning short gamma through the next expiry cycle.
In our view, while the sharp drop shook out many fast-money flows, the deep-pocket players appear to be absorbing at logical areas, at least for now. This is not to say a new uptrend has begun, but rather that reaction lows are tentatively forming. As always, confirmation doesn’t arrive from isolated prints, but rather from the continuity between sessions. Observing how open interest flows match with spot price will be a reliable guide in the coming week.
