That area between $85.45 and $86.71 served as a key support zone for much of the period following the start of the U.S.-Iran conflict (red numbered circles). Now that the price has broken below that floor, the zone becomes an important resistance area. If the bearish trend is to remain intact, sellers would not want to see crude oil climb back above that resistance cluster anytime soon.

Fundamentally, the backdrop has shifted toward a more bearish outlook. Expectations for increased global supply, the reopening of the Strait of Hormuz, and the potential easing of sanctions on Iran should all work to add barrels back into the market and weigh on prices. As a result, the path of least resistance currently appears to be to the downside.

The primary risk to that view is a renewed escalation in the conflict. Any breakdown in the agreement, renewed military action, or another closure of the Strait of Hormuz could quickly reintroduce a geopolitical risk premium and send prices sharply higher. It is worth remembering that crude oil was trading at just $67.04 on February 27, the day before the war began, underscoring how much of the previous rally was driven by supply disruption fears.

On the downside, getting below $77.57 would have traders looking toward the 200 day moving average at $73.42. Below that and traded start to target the February 27 closing level of $67.04 as a target.

The price of gas is $4.06 down from around $4.56 high. The progression of price from the start of the war:

• February 27: $2.98 per gallon (pre-war)
• March 26: $3.98 per gallon
• Early April: $4.16 per gallon
• Mid-May peak: Above $4.50 per gallon nationally
• Recent high: About $4.56 per gallon in May before beginning to decline