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Eight-Week Ceasefire Drives WTI Below $92, NatGas Rallies to $3
WTI crude fell to $91.99 as U.S.-Iran ceasefire holds in week 8; natural gas rallied to $2.995 on technical momentum. EIA data and OPEC+ meeting are next tests for the fragile deal.
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The U.S.-Iran conditional ceasefire, now in its eighth week, is driving a clear divergence in the energy complex. WTI crude fell to $91.99 on the 2-hour chart, breaking below the ascending channel floor near $96.05. Natural Gas rallied to $2.995, clearing the red 50-period moving average near $2.95. The ceasefire removed the acute geopolitical uncertainty that dominated oil markets in March and April. Tanker traffic through the Strait of Hormuz has gradually resumed, letting market participants shift focus from tail-risk hedging to supply-demand mechanics.
Ceasefire Holds: Strait of Hormuz Traffic Resumes
The ceasefire has held long enough for tanker traffic to resume, undoing the supply disruption fears that drove crude oil above $102. Normalization is not complete. Some Gulf production facilities remain under repair. Asian demand, while picking up from post-spike lows, has not fully rebounded, especially in emerging markets. The agreement is fragile. If negotiations break down, the risk of supply disruptions could return quickly. For now, the market prices a scenario where supply recovery continues and the geopolitical premium fades.
Transmission Path: From Geopolitical Risk to Supply Mechanics
OPEC+ Output, U.S. Production, Gulf Repairs
The supply side is stabilizing. U.S. production is resilient. OPEC+ output remains steady. Repairs in several Gulf fields are progressing. These factors collectively support a more balanced oil market. The complete normalization of flows has not occurred, creating a tension between price action and underlying supply data. The market prices a full recovery that may take weeks to materialize.
- U.S. production remains resilient.
- OPEC+ output is steady.
- Gulf field repairs are progressing.
Inflation, Central Bank Implications, and the Dollar
Lower oil prices reduce imported inflation for the United States, Europe, and Asia. This could ease pressure on central banks to maintain restrictive policy. For the U.S. dollar, a sustained oil decline typically weakens the USD against commodity-linked currencies such as the Canadian dollar and Norwegian krone. The EUR/USD profile may benefit if European energy costs fall further. The ceasefire fragility means the transmission is not guaranteed. A reversal could reignite inflation expectations and support the dollar. Traders watching forex market analysis should monitor the correlation between WTI and USD/CAD, which has tightened as the ceasefire stabilises.
Natural Gas: Technical Rally Against Bearish Fundamentals
Technical Setup: Ascending Channel Intact
Natural Gas on the NYMEX trades at $2.995 after green candles pushed above the red 50-period moving average near $2.95 and breached a prior swing high. The price respects a white ascending trendline, forming higher lows within a blue ascending channel from the May lows near $2.80. The RSI is above 55, indicating positive momentum. The next resistance cluster is the Fibonacci extension area from $3.008 to $3.066. Bull market structure is confirmed by price continuing higher from $2.80 and making successive higher lows.