With fighting in the Middle East, Saudi’s oil pipeline was blown up. Oil can’t be shipped out through the Strait of Hormuz, so tanker freight rates have surged to as high as one million dollars per day. Last week, oil prices briefly pushed above $100.

Today, Binance’s crude oil contract CLUSDT is quoted at $95.3, down 3.7% in a day. High: 99.2, low: 94.7. Trading volume: $1 billion.

Although it looks like it’s falling hard, it’s actually because prices have risen too much and some people are taking profit. But the pipeline is still offline, tankers are still priced at record highs, and inventories are still declining. Fundamentally, nothing has really changed.

The funding rate has dropped to zero, which suggests that neither longs nor shorts are willing to pay up. Everyone is waiting and watching.

My view is that this is just a breather at a high level, not a trend reversal. If geopolitics escalates further, it could quickly move up again; be careful when chasing prices.

Not investment advice. Contract volatility is high—make your own decision.