Oil Futures See Technical Recovery Following Sharp Losses

Crude oil futures markets witnessed a technical recovery after recent sharp declines. The temporary peace agreement between the United States and Iran, coupled with expectations of the Strait of Hormuz reopening, had alleviated global supply concerns, leading to substantial drops in oil prices. However, as prices entered oversold territory, relative strength indicators began generating positive signals, triggering some buying interest in the market.

Oil prices experienced a sharp downturn, particularly on June 18-19, driven by diplomatic progress between the US and Iran. Brent crude oil prices fell from $82.97 to $77.31 per barrel, while West Texas Intermediate (WTI) crude oil contracts traded at $74.28. This decline was primarily attributed to the signing of a temporary agreement aimed at ending the conflict between the two nations and resuming transit through the Strait of Hormuz, thereby reducing concerns about oil supply disruptions. Statements from Pakistan's Prime Minister Shahbaz Sharif confirmed this understanding, reinforcing market expectations of an increased oil supply.

Following these sharp losses, oil futures demonstrated a cautious upward movement. This limited rebound in prices was supported by relative strength indicators (RSI) generating positive signals after reaching deeply oversold levels. This development led to a technical recovery, which market participants viewed as a short-term correction. Nevertheless, analysts indicate that despite this recovery, the overall technical outlook remains bearish, with prices trading below dynamic resistance levels such as the 50-day Exponential Moving Average (EMA50).

In a broader economic context, the 60-day peace roadmap between the US and Iran is considered a significant turning point for global energy markets. The agreement also includes temporary sanctions relief for Iranian crude oil and petroleum product exports. This situation increases expectations that a significant volume of Iranian oil could return to international markets as shipping activities in the Strait of Hormuz normalize. Brent crude, which had surged above $120 per barrel at the peak of the conflict, has since retreated significantly with these developments, approaching pre-war levels.

Market analysts and expectations suggest that the current recovery may be limited. GCM Yatırım analysts emphasize that as long as oil prices remain below certain resistance levels, a downward trend is likely to prevail. Experts note that low global crude oil inventories and the need to rebuild strategic reserves could provide a floor for prices. However, the potential for additional supply from Iran, especially when combined with a decline in Chinese demand, could create a supply surplus in the market. Therefore, markets will continue to closely monitor changes in the supply-demand balance alongside geopolitical developments.