Crude Oil Pulls Back from Five-Month High as Iran Strike Fears Ease

Crude oil opened the week with a sharp gap lower, unwinding part of Friday's rally that had lifted WTI above $103 and Brent beyond $117 on fears of an imminent US-Israeli strike against Iran. President Trump ruled out immediate military action on Sunday, prompting traders to dial back the risk premium that had accumulated through last week. WTI December contracts slipped 1.7% to trade near $100.50, while Brent January futures held firmer with a 1.3% gain, reflecting the market's distinction between headline noise and genuine supply threats. The pullback follows a familiar pattern: premiums spike into weekends on Gulf escalation fears, then fade when the anticipated strikes fail to materialise or officials issue de-escalatory comments.

The geopolitical backdrop remains far from resolved. Ongoing Houthi attacks against Saudi infrastructure and reports of missile exchanges near the Strait of Hormuz keep physical supply risk front and center. A missile from an unknown fighter jet struck an IRGC launcher in Sirik after it fired toward the Strait, underscoring how quickly incidents near transit chokepoints can reignite premium-building. The crude market has learned to distinguish between peripheral strike exchanges—which tend to fade quickly—and credible threats to Hormuz flows, which sustain elevated prices. Planned three-way talks between the US, Russia and Ukraine in early November add another layer of uncertainty, with any progress potentially easing broader risk appetite but doing little to address the immediate Gulf tensions.

What the calendar says

The week ahead is dominated by central bank decisions that typically move currency pairs and broader risk sentiment rather than crude directly, but oil remains exposed to any shifts in the dollar or liquidity conditions. On 28 October at 18:00 UTC, the Federal Reserve announces its policy decision, an event that moves EUR/USD, GBP/USD, USD/JPY, gold and crypto markets. A hawkish hold or dovish tilt can ripple through commodity pricing via the dollar channel. The European Central Bank follows on 29 October at 12:15 UTC with its rate decision, affecting EUR/USD. The Bank of Japan delivers its policy statement on 30 October, with the timing not yet fixed, moving USD/JPY. Further out, the Bank of England meets on 05 November at 11:00 UTC with its Monetary Policy Report, influencing GBP/USD. None of these directly targets oil fundamentals, but the collective impact on the dollar and risk appetite can shift commodity flows. The full schedule sits on our economic calendar.

Technical picture

The hourly chart for WTI shows a steep rally from late September lows near $87 through to the recent peak above $103, with the advance accelerating into a parabolic channel since mid-October. Price has now gapped down to trade around $100.70, testing support at the 23.6% Fibonacci retracement near $99.30 and the 50-period simple moving average at $97.83. The 38.2% retracement sits at $96.84, forming a broader demand zone where dip-buying has historically emerged. Momentum indicators reflect the shift: the MACD crossed below its signal line, and RSI dropped to 46, below the 50 centerline that separates bullish from bearish short-term bias.

Resistance now sits at the $103.29 Fibonacci anchor and the prior consolidation zone near $102. A sustained reclaim of that band would reopen the path toward the early-war highs near $114 for Brent, translating to roughly $108–110 for WTI. The longer-term 200-period moving average holds at $102.83, providing structural support if the pullback extends. The key tell for the week ahead is whether any fresh Hormuz incident or retaliation rebuilds the premium into next weekend, a pattern that has repeated through prior geopolitical cycles, or whether the absence of further escalation allows the gap to fill and prices to consolidate within the $97–103 range.