Published: 16 January 2026,02:50
Daily Market Analysis New
Key Takeaways:
*Oil prices dropped more than 4% after geopolitical risk premiums unwound.
*President Trump said violence in Iran appeared to be easing, reducing fears of imminent military action.
*Earlier gains had been driven by concerns over a potential U.S. strike and reports of military personnel movements in the region.
*Markets remain sensitive to Middle East developments, with volatility expected to persist.
Oil prices extend their losses after comments from U.S. President Donald Trump helped ease market fears that a U.S. military strike on Iran could be imminent, prompting a sharp reversal from earlier geopolitical-driven gains.
Speaking to reporters on Wednesday, Trump said he had been informed by what he described as “very important sources” in Iran that violence had subsided. “The killing has stopped,” he said, adding that there were “no plans for executions,” according to information relayed to him. Trump noted that the White House would continue to monitor developments closely, but the remarks were enough to dial down immediate escalation risks that had been priced into oil markets.
Earlier in the week, crude prices had surged after Trump canceled meetings with Iranian officials and publicly signaled support for protesters, telling them that “help is on its way.” Those comments, combined with heightened rhetoric from Washington, had fueled concerns that the U.S. was moving closer to direct military involvement, driving oil higher on fears of potential supply disruptions.
Market anxiety was further amplified by reports of unusual military movements in the region. Reuters reported that some personnel had been instructed to leave the U.S. military’s Al Udeid Air Base in Qatar by Wednesday evening, while the BBC said British personnel were also being relocated from the base. The reports added to speculation that contingency preparations were underway, intensifying the geopolitical risk premium embedded in crude prices.
Thursday’s selloff reflected a partial unwinding of those fears as traders reassessed the likelihood of near-term military action. Nevertheless, analysts caution that oil markets remain highly sensitive to headlines, with Middle East geopolitical developments continuing to pose a key source of volatility for prices in the near term.
Technical Analysis
Crude oil is trading lower while testing the lower boundary of its upward channel near the 58.70 support level, following a confirmed break below the previous support at 60.60. Despite the recent sell-off, technical signals hint at potential short-term stabilization, with MACD beginning to form a golden cross and RSI attempting to stabilize. This suggests that a technical rebound could be possible in the near term.
If bullish momentum gains traction, crude could retrace toward the 60.60 resistance, offering a short-term recovery opportunity. However, if buying pressure fails to materialize, the market may resume its decline following a double breakdown below the channel and prior support, with the next key level at 56.85 providing potential downside support. Traders should closely monitor momentum indicators and price action around these levels to gauge the sustainability of any bounce.
Resistance Levels: 60.60, 62.55
Support Levels: 58.70, 56.85
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