Oil Prices Fall Today - What Are the Outlooks for the Future?

Oil at the Basic Level

Oil prices fell during trading on Thursday, with West Texas Intermediate crude dropping by about 1% to levels near $97.50 per barrel, ending a three-day rally.

This decline came after the United States announced that Israel and Lebanon had reached a ceasefire agreement, provided that Hezbollah commits to halting its military attacks, However, markets remain cautious about this news, given the absence of any official confirmation or clear indications that Hezbollah has agreed to the terms of the agreement so far.

Recent statements by U.S. President Donald Trump have also bolstered investors’ hopes for progress in the ongoing negotiations with Iran, as he indicated on Wednesday that a diplomatic breakthrough could be achieved before the end of the week.

Despite these positive developments, geopolitical risks continue to cast a shadow over energy markets, particularly following the exchange of strikes between the United States and Iran in recent days, and the spread of tensions to include Bahrain and Kuwait, which keeps concerns about the stability of global oil supplies alive.

On the other hand, data from the U.S. Energy Information Administration provided some support for prices, after showing a decline in U.S. crude oil inventories for the sixth consecutive week, indicating continued strong demand and inventories approaching minimum operating levels.

Amid cautious optimism regarding the diplomatic path in the Middle East and ongoing supply challenges, oil prices remain vulnerable to volatility in the coming period as investors monitor any political or economic developments that could affect market balance.

Oil from a Technical Perspective

Oil prices retreated after approaching a retest of the broken uptrend line near $99 per barrel.

We expect oil to retreat from current prices to $95, then $90, and finally to the lower boundary of the descending price channel on the four-hour chart near $85 per barrel.

This scenario would fail if prices break above the $106 level.