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21.05.202609:12 Forex Analysis & Reviews: Oil Slightly Recovers from Yesterday's Decline

Relevance up to 03:00 UTC--4

Trump continues to make statements, and the oil market is reacting to them. Currently, Brent is trading around $106 per barrel after a 5.6% drop on Wednesday, while WTI has recovered above $99 per barrel. The sharp price decline yesterday was prompted by Trump's remarks that the U.S. is in the "final stages" of negotiations with Iran. The market interpreted this as yet another signal of an approaching deal—and immediately priced in part of the geopolitical risk premium.

Exchange Rates 21.05.2026 analysis

However, trading on such headlines is becoming increasingly difficult. This week, conflicting reports about the progress of negotiations have sent oil prices swinging up and down by several percentage points.

At the moment, Iran is reviewing a new American draft agreement in response to its 14-point proposal, but there has been no news on their response yet. Meanwhile, Tehran warned that in the event of new attacks from the U.S. or Israel, it would take retaliatory measures not just in the Middle East. Trump stated that a deal will happen—or "we will take some unpleasant actions."

It is important to understand that even a peaceful agreement will not be an instant remedy for the oil market. The CEO of Abu Dhabi National Oil Company, Sultan Al Jaber, stated yesterday that the full recovery of supplies from the region will take time, possibly until 2027, and called the closure of the Strait of Hormuz the most significant supply disruption in history.

According to Goldman Sachs, transporting oil from the Persian Gulf to its destination takes up to 55 days—meaning that stock shortages will persist long after the Strait is opened.

Interestingly, the U.S. oil inventory report was also released yesterday. According to last week's data, inventories decreased by approximately 7.9 million barrels as overseas buyers actively accumulated American oil to offset Middle Eastern shortages.

Exchange Rates 21.05.2026 analysis

On the positive side, there have been initial signs of renewed traffic through the Strait: three oil supertankers, according to tracking data, attempted to cross it. Iran reported that 26 vessels passed in the last 24 hours, although its previous reports have significantly diverged from actual estimates.

Regarding the current technical picture of oil, buyers need to reclaim the nearest resistance at $100.40. This will allow targeting $106.80, above which breaking through will be quite challenging. The furthest target will be around $113.40. If oil prices fall, bears will attempt to take control at $92.50. If they succeed, a breakout from this range will deal a significant blow to bulls' positions and push oil down to a low of $86.60, with the prospect of reaching $81.40.

*这里的市场分析是为了增加您对市场的了解,而不是给出交易的指示。

Miroslaw Bawulski,
Analytical expert of InstaSpot
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