Previously, market concerns about a US strike on Iran had significantly priced in geopolitical risk premiums, driving international oil prices sharply higher on Thursday, with Brent crude rising over 4% and WTI crude rising nearly 3%. However, as Trump released clear statements of de-escalation, the oil market quickly corrected, gradually digesting the previously accumulated risk premiums related to escalation. This recent pullback in oil prices is a corrective adjustment in risk sentiment, not a fundamental reversal. The multiple supply disruptions that previously supported higher oil prices have not completely subsided. This market shift fully reflects how the market continuously prices and reprices its expectations in response to new information. Currently, market focus has completely shifted to Tehran's response to the US proposal. If the response is positive, and substantial progress is made in US-Iran negotiations, the market will anticipate a significant improvement in crude oil supply, potentially triggering further price declines. Conversely, if the response is negative, and the two sides reach a stalemate, it will effectively limit the downside potential of oil prices, supporting a high-level consolidation pattern. Fundamental Overview Previously, the market was rife with rumors that the US might launch a military strike against Iran before the midterm elections. Coupled with multiple negative factors such as attacks on oil tankers in the Persian Gulf, Houthi attacks on Saudi energy facilities in Yemen, and Hurricane Isaias shutting down over 63% of US Gulf Coast oil production capacity, traders significantly priced in geopolitical risk premiums for oil assets, driving a strong price surge. However, with yesterday's easing of tensions in the US, this short-term speculative risk premium is rapidly dissipating. Trump stated on the Truth social media platform that the United States is engaged in productive consultations with Tehran and will not launch any military attack on Iran before the November 3rd election to ensure a smooth midterm election process. This statement directly ended short-term panic in the market regarding extreme conflict, quickly reversing bullish speculative sentiment in the oil market. A large number of short-term long positions were liquidated, putting downward pressure on oil prices. This is a typical example of market mechanisms: the market repeatedly prices future expectations based on continuously emerging news. Concerns about escalating tensions drove a sharp rise in crude oil prices, with the market anticipating risks such as damage to regional energy facilities, disruptions to oil transportation, and geopolitical retaliation. The easing of tensions reversed previous market expectations, with traders unwinding hedging positions or closing speculative long positions, pushing oil prices back to fundamental pricing. Looking ahead, Iranian Foreign Minister Araqchi stated yesterday that Iran is carefully studying the US response to its proposal and expects to provide a formal reply in the coming days. The current US-Iran standoff remains at a critical juncture, with no substantial consensus reached between the two sides, and uncertainty surrounding the Middle East energy supply chain persists. If negotiations progress positively, the market anticipates improved crude oil supply and reduced shipping risks, potentially leading to a significant sell-off and price drop. Conversely, if the outcome falls short of expectations and negotiations stall, the current market trend is unlikely to change drastically, but it will likely curb further declines in crude oil prices. Coupled with persistent regional shipping risks, oil prices will maintain their resilience at higher levels. (Crude Oil Technical Analysis) (WTI Crude Oil 4-Hour Chart Source: EasyForex) As seen on the daily chart, the US crude oil CFD (USOIL) price saw a slight pullback, retracing some of the previous trading day's gains, influenced by the easing of tensions following Trump's remarks. If the price falls back to the lower channel line, buying power is expected to re-enter the market; stop-loss orders should be placed below the lower channel line, with the next target being the 110.00 resistance level. The overall bullish structure on the daily chart remains intact; the short-term pullback is merely a technical correction, and the medium-to-long-term high-level consolidation pattern for oil prices remains unchanged. Conversely, bears will only enter the market aggressively after a decisive break below the channel support, with an initial target of 80.00 and a further target of the key support level at 68.00. On the 4-hour chart, the price previously broke below the downtrend line, completely opening up short-term upside potential, with the previous high potentially testing the 96.77 level. If the price reaches this resistance level, bears may enter the market en masse, with stop-loss orders placed above this level, betting on a pullback to the lower channel line. Bulls are patiently waiting for prices to break through the resistance level before adding to their bullish positions. The next key target after a breakout is the 110.00 resistance level. Upcoming Market Drivers The University of Michigan Consumer Sentiment Index will be released at the end of this week. This data has a weak correlation with the commodity market and is not expected to cause significant market volatility. Currently, the core driver of the oil market is entirely focused on geopolitical tensions. Progress in US-Iran negotiations, developments in Middle East conflicts, and the aftermath of the Gulf of Mexico hurricane will continue to dominate short-term oil price movements. The market's core focus remains on the future development of the US-Iran situation; any reversals or breakthroughs in negotiations will trigger significant oil price fluctuations.