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CRUDE BREAKS DOWN, TESTS SUPPORT AS BEARISH TREND BUILDS

Oil prices are falling on Thursday, dropping to their lowest levels since the early days of the U.S.-Israeli conflict involving Iran. The move comes as markets react to an interim agreement that could wind down the war, reopen the Strait of Hormuz, and ease sanctions on Tehran — all of which point to more oil supply coming back into the global market.

Right now, NYMEX crude futures CLc1 are down more than 2%, hovering just over $75.00. That extends a bearish turn confirmed at the end of May, when prices finished at $87.36, putting them back inside the monthly Ichimoku Cloud. From a technical standpoint, that shift signaled a trend reversal and suggested that a deeper pullback could be in play.

At the moment, crude is testing some key support levels that traders are watching closely. The 200-week moving average (WMA) sits just over $75.00, while the rising 40-WMA — often used as a proxy for the 200-day moving average (DMA) — comes in near $74.20 (with the 200-DMA now around $73.90). If prices decisively break below this zone, it could open the door to further downside, with the next major level tied to an early-March gap around $67.83.

Looking further out, there are even lower reference points: the December 2025 low at $54.98 and the bottom of the monthly cloud near $45. On the flip side, resistance stands at about $80.56. To meaningfully shift sentiment back to bullish, crude would need to climb above $87.65 and clear the cloud again.

Energy stocks are also feeling the pressure. The S&P 500 Energy sector .SPNY just closed at its lowest level since mid-February. While it remains the best-performing sector year to date, it's also the weakest performer this quarter and on pace for its biggest quarterly drop since mid-2020.

(Terence Gabriel)

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