Oil Falls Again

Crude prices are trading lower again on Friday as optimism around US/Iran peace talks continues to dominate price action. Crude futures had rebounded off Wednesday’s lows and were pushing higher again yesterday before sell interest kicked in, seeing the market gap lower today. Speaking in Las Vegas last night, Trump reiterated his view that the war with Iran would likely end soon, saying "let's see what happens over the next week or so". Sentiment is also being bolstered by news of the 10-day ceasefire agreed Israel and Lebanon. Trades now sense that there is a real chance of a proper peace deal being agreed in the region, which would firmly dilute supply risks in the Middle East.

News Flow Remains Key

Looking ahead, focus will be on incoming news flow with fresh talks expected to take place after Trump signalled earlier in the week that negotiations with Iran would resume this week. If talks progress well and traders sense that a proper peace deal is likely to be achieved, oil prices should continue to fall. However, if talks stumble again this could lead to a temporary spike in oil prices. As such, volatility risks remain elevated near-term with incoming news flow set to drive price action.

Technical Views

Crude

The rebound in crude this week has stalled into the 95.06 level with price since turning lower again. While below here, and with momentum studies bearish, focus is on a continuation lower and a test of the 84.60 support level next with 77.65 the deeper level to note. Above, 101.69 is the key pivot to watch.