Summary

• False alarm-driven spike fades quickly: WTI crude surged 5% on unverified reports of an attack in Tehran but retraced most gains after confirmation it was a drill, highlighting headline-driven volatility amid a fragile US-Iran ceasefire.
• Market signals point to limited upside: Declining implied volatility and reduced backwardation suggest easing supply stress and cap near-term bullish momentum, reinforcing the view that the recent spike is largely "noise."
• Technicals favour mean reversion decline: Oil is testing range resistance near the 20-day MA, with bearish momentum signals (RSI divergence) indicating downside risk toward $90.50 and potentially $86-82 unless $102.25 is decisively broken.

By Kelvin Wong

The US-Iran ceasefire agreement extension by US President Trump to an indefinite period is in a “fragile state” as the US waits for Iran’s new proposal to kickstart another round of peace talks.

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