Oil Falls Below $90: Trump Steps Back from Iran Threat

The news points to a reduction in the geopolitical risk premium; Trump's retreat from the Iran threat eases supply disruption concerns, creating downward pressure on oil. The price has already fallen more than 4% in 24 hours and dropped below $90; RSI at 39 confirms weak momentum. MACD is in negative territory and hovering near the signal line, indicating the decline has not yet reached oversold territory. The price remaining below SMA20 and SMA50 supports a short-term downtrend. However, some of the news-driven decline may already be priced in; therefore, I expect a cautious downward bias in the 1-3 day outlook.

The decline in oil prices below $90 and the reduction in the geopolitical risk premium are a negative signal in the short term for integrated energy companies such as XOM. The stock has already fallen 2.5% in 24 hours and the RSI at 31 is close to oversold territory, indicating that part of the decline is priced in. The MACD is in negative territory and the price is trading below the SMA20 and SMA50; the technical picture is weak. Nevertheless, oversold conditions could trigger short-term bargain hunting, so I maintain a moderate level of confidence in the downward direction. In the 1-3 day outlook, downward pressure may continue, but heavy selling could remain limited.

The decline in oil prices below $90 is a negative signal in the short term for integrated oil companies such as Chevron; crude oil revenues and margin expectations may come under pressure. The technical picture is also weak: the price is below the SMA20 and SMA50, the MACD is in negative territory, and the 24-hour change is -2.5%. With RSI14 at 30.7, it is close to the oversold threshold; while this raises the likelihood of bargain-hunting buying in the short term, the trend has not yet reversed. The easing of the geopolitical risk premium is keeping the news flow negative. Downward pressure may persist for 1-3 days, but the pace of the decline may remain limited due to oversold conditions.