West Texas Intermediate crude oil is extending sharp losses Tuesday, trading around $77.90 per barrel with a nearly 4% decline following Monday’s dramatic 9% plunge. The sell-off accelerated after tensions between the United States and Iran showed signs of easing with a pause in attacks, removing the geopolitical risk premium that had supported prices in recent sessions.
The rapid deterioration in oil prices reflects traders aggressively unwinding positions as Middle East conflict fears subside. WTI has now breached the psychologically important $80 level, with technical analysts eyeing the 200-day simple moving average as the next downside target. This two-day combined drop of approximately 13% represents one of the sharpest corrections in recent months.
Brokers and energy traders should prepare for continued volatility as markets reassess risk premiums. Energy-dependent currencies including the Canadian dollar and Norwegian krone face immediate pressure from the price collapse.
FXnCO Insight
Energy sector portfolios require immediate hedging review as oil’s swift de-escalation premium creates further downside risk toward technical support levels.
Source: FXStreet