Crude Selling Deepens

Oil prices are continuing to push lower on Monday following a heavy downside reversal last week. The move comes amidst easing supply fears after Saudi Arabia announced that it can return the East-West pipeline to full capacity within 6 weeks. Additionally, there is growing optimism regarding the prospect of talks between Trump and Gulf-state leaders this week in New York on the sidelines of the UN General Assembly meeting taking place.

Iran Submits Fresh Peace Proposal

Iran has reportedly submitted fresh terms to the US administration, via UN mediators, under which it would agree to an end to the war, including and full end to the US naval blockade, the unfreezing of all frozen assets and a total end to US military action against Iran. Qatar and Pakistan have helped so far in the negotiation process and Iran now awaits an official response from Trump. Trump has recently signalled that believes the war could soon come to an end and price action in crude at the moment seems to reflect growing optimism. While it is unlikely that Trump will accept Iran’s terms on first pass, this could mark the start of a fresh negotiations period between the two countries. If we hear any agreement for a new ceasefire and renewed peace talks, this could see oil prices falling further near-term as optimism grows.

Technical Views

Crude

The reversal lower from the 104.26 highs has seen the market breaking back below the 95.06 level. With momentum studies turning bearish, focus is on a continued move lower with 84.60 the next big support area to watch. We could see some reactive buying ahead of that level as we retest the July highs though, while price holds below 95.06, the focus is on further losses for now.