Friday’s decline has brought light crude futures back under pressure, with the market now targeting $60.40. A break below this level would confirm a continuation of the recent downtrend. Should prices fall through the longer-term bottom at $59.91, bearish momentum could intensify, potentially driving prices down toward the next major floor at $55.74.
The 50-day moving average has crossed below the 200-day moving average—currently at $62.93 and $63.01, respectively—signaling a bearish crossover. This technical alignment points to a growing downside risk, especially as resistance near those levels holds firm.
Middle East Risk Premium Eases After Israel-Hamas Ceasefire
Crude prices have retreated as geopolitical risk premium unwinds following a ceasefire agreement between Israel and Hamas. Under the U.S.-backed plan, Israel will partially withdraw from Gaza in exchange for the release of hostages and prisoners. The easing of tensions reduces the threat to shipping lanes in the Red Sea and Suez Canal, which had supported crude prices in recent months.
“With the ceasefire in place, the market is breathing easier about the security of global crude flows,” said SEB’s Bjarne Schieldrop. This shift is removing some of the war-related premium embedded in crude pricing since late 2023.
OPEC Output Still in Focus Despite Ceasefire Headlines
While the Gaza ceasefire dominated headlines, traders are turning their attention back to the supply outlook. OPEC+ agreed to a smaller-than-expected output hike for November, which helped limit oversupply concerns. Analysts at BMI noted that recent supply growth “has not manifested in substantially lower prices,” supporting a modest weekly gain for Brent.
Still, WTI posted a 0.5% loss for the week, compared to a 1% rise in Brent. U.S. political risk remains on the radar, as concerns about a prolonged government shutdown could weigh on economic activity and energy demand.
