Oil prices fall nearly 4% to $77.90 after a 9% drop Monday amid reduced geopolitical risks in the Middle East.
West Texas Intermediate crude extended losses Tuesday, trading near $77.90 after a 4% decline on the day. The drop follows a 9% plunge Monday as tensions between the US and Iran eased, reducing security risks around the Strait of Hormuz and prompting traders to unwind geopolitical premiums in oil prices.
Prices briefly reclaimed the 100-day Simple Moving Average at $88.19 last week but failed to hold above it. WTI has since fallen below the 50-day SMA at $81.26, signaling a bearish near-term outlook. Technical indicators are mixed, with the RSI slipping below 50 while the MACD remains unclear.
Despite diplomatic efforts, including a US proposal for a deal and Oman’s joint management plan for the Strait, risks of renewed conflict persist. Analysts warn the pullback may be short-lived, with geopolitical risks keeping a floor under prices.