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Crude oil futures settled at $88.20, down $3.10, after trading between $85.95 and $91.55. The price dipped below the 50% retracement level of the December 17 low ($87.34) but remained above the 100-day moving average target at $85.66. Despite heightened geopolitical tensions from an Iranian drone attack on an Apache helicopter, which historically would have driven prices higher, crude oil failed to reverse its downward trend. This suggests weakening market sentiment despite supply risks.
The decline highlights shifting dynamics in oil markets, where geopolitical events are no longer sufficient to counterbalance oversupply concerns or economic slowdown fears. Traders should monitor the 100-day moving average as a critical support level. A break below $85.66 could signal a deeper correction, while a rebound above $91.55 might indicate renewed bullish momentum.
For Gulf investors, this volatility underscores the importance of technical analysis and risk management. The failure to hold above key levels like the 50% retracement suggests short-term bearish pressure. Market participants should watch OPEC+ policy updates and US production data for potential catalysts in the coming weeks.
