West Texas Intermediate crude oil has dropped below the $99 mark to trade around $98.50 during Friday’s early European session as traders lock in profits following recent gains. The pullback comes after technical indicators showed oversold conditions in the energy market, prompting position unwinding. Contributing to the decline, US crude inventory data revealed a smaller-than-anticipated drawdown, dampening bullish sentiment that had previously supported higher prices.
The move affects energy traders, commodity-focused funds, and oil-linked currencies including the Canadian dollar and Norwegian krone. While geopolitical tensions between the US and Iran remain a wildcard factor that could reverse the decline, near-term momentum appears weighted toward consolidation as market participants reassess positioning ahead of the weekend.
FXnCO Insight
Traders should monitor the $98 support level closely, as a break below could trigger additional technical selling, while any escalation in US-Iran tensions could quickly snap prices back above $100.
Source: FXStreet