🔥Four straight days of decline! WTI’s oil price has fallen more than 6% in three days, and traders are pricing in “peace”!
On August 26, international oil prices continued to plunge. WTI crude futures once slid more than 5% to $80.55 per barrel, while Brent crude futures fell 5.75% to $85.33 per barrel. The previous two trading days had already seen cumulative losses: Brent dropped steadily from above $92 to around $85. In just three trading days, Brent’s total decline has exceeded 6%.
💥 What happened?
① Geopolitical risk premium is being unwound faster. Iran and Oman have announced technical talks regarding a “temporary joint maritime corridor,” aiming to reopen the Strait of Hormuz. Although, on the same day, an oil tanker at the entrance to the strait was hit by an unidentified projectile, traders are betting that a peace agreement will happen “sooner rather than later.” With U.S. military actions largely over and shifting toward economic sanctions, market worries have clearly cooled.
② Supply-and-demand fundamentals have turned broadly bearish. The high season for refined-oil consumption in the Northern Hemisphere is nearing its end. Overseas refinery maintenance is increasing, and expectations for crude processing demand are weakening at the margin. OPEC+ has been increasing production for months in a row: on August 2, it approved a further average daily increase of 188,000 barrels starting in September—fully reversing all the production cuts made since 2023. U.S. crude oil inventories have continued to build: the week of August 14 saw a sharp increase of 4.4 million barrels in commercial crude inventories.
③ The “buy expectations, sell actual news” effect. On August 24, the U.S. announced what it called the “toughest ever” economic sanctions on Iran, covering five areas including aviation, digital assets, gold, shipping, and the technology sector—about 60 entities were added to the list. But once the sanctions take effect, the “uncertainty is removed,” which in turn triggers profit-taking outflows.
📊 Short term: Bears are in control—watch the $80 level
The market is currently pricing “geopolitical de-escalation,” but the peace agreement has not yet been signed. $80 is a key psychological level for WTI; if it breaks, it could trigger a larger wave of stop-loss selling. Last week, the U.S. API crude inventories jumped by 4.2 million barrels. If the EIA’s official data confirms it, that would mark the fourth consecutive week of inventory builds.
🚀 Long term: Morgan Stanley still targets $100
Morgan Stanley has significantly raised its oil price outlook, expecting Brent to spike toward nearly $100 per barrel in Q4. The rationale is that Middle East supply recovery is slower than expected, and offshore floating storage inventories have dropped by about 170 million barrels. But in the short term, “peace expectations” are dominating the trading logic.
Brothers/sisters, do you think this leg of the oil price move will break below $80?
$CL
$BZ
On August 26, international oil prices continued to plunge. WTI crude futures once slid more than 5% to $80.55 per barrel, while Brent crude futures fell 5.75% to $85.33 per barrel. The previous two trading days had already seen cumulative losses: Brent dropped steadily from above $92 to around $85. In just three trading days, Brent’s total decline has exceeded 6%.
💥 What happened?
① Geopolitical risk premium is being unwound faster. Iran and Oman have announced technical talks regarding a “temporary joint maritime corridor,” aiming to reopen the Strait of Hormuz. Although, on the same day, an oil tanker at the entrance to the strait was hit by an unidentified projectile, traders are betting that a peace agreement will happen “sooner rather than later.” With U.S. military actions largely over and shifting toward economic sanctions, market worries have clearly cooled.
② Supply-and-demand fundamentals have turned broadly bearish. The high season for refined-oil consumption in the Northern Hemisphere is nearing its end. Overseas refinery maintenance is increasing, and expectations for crude processing demand are weakening at the margin. OPEC+ has been increasing production for months in a row: on August 2, it approved a further average daily increase of 188,000 barrels starting in September—fully reversing all the production cuts made since 2023. U.S. crude oil inventories have continued to build: the week of August 14 saw a sharp increase of 4.4 million barrels in commercial crude inventories.
③ The “buy expectations, sell actual news” effect. On August 24, the U.S. announced what it called the “toughest ever” economic sanctions on Iran, covering five areas including aviation, digital assets, gold, shipping, and the technology sector—about 60 entities were added to the list. But once the sanctions take effect, the “uncertainty is removed,” which in turn triggers profit-taking outflows.
📊 Short term: Bears are in control—watch the $80 level
The market is currently pricing “geopolitical de-escalation,” but the peace agreement has not yet been signed. $80 is a key psychological level for WTI; if it breaks, it could trigger a larger wave of stop-loss selling. Last week, the U.S. API crude inventories jumped by 4.2 million barrels. If the EIA’s official data confirms it, that would mark the fourth consecutive week of inventory builds.
🚀 Long term: Morgan Stanley still targets $100
Morgan Stanley has significantly raised its oil price outlook, expecting Brent to spike toward nearly $100 per barrel in Q4. The rationale is that Middle East supply recovery is slower than expected, and offshore floating storage inventories have dropped by about 170 million barrels. But in the short term, “peace expectations” are dominating the trading logic.
Brothers/sisters, do you think this leg of the oil price move will break below $80?
$CL
$BZ