• WTI fell into the $89.00s on Friday and current trades about $2.0 down on the day.
• Technical selling, hope for a diplomatic solution to Ukraine crisis and talk of an Iran/US deal nearing soon weigh on oil.

Technical selling, hopes that a high-level US/Russia meeting next week might solve the Ukraine stand-off and bets that US sanctions on Iranian oil exports will soon end amid momentum towards reviving the 2015 nuclear pact weighed on oil on Friday. Front-month WTI futures broke below a key upwards trendline that had been supporting the price action since the start of the year and slumped to the mid-$89.00s per barrel, where they now trade lower by more than $2.0 on the day. Bears will be eyeing an imminent test of the next key area of support in the $88.50 region in the form of last week’s lows.

Despite news that pro-Russia separatist leaders in the self-proclaimed Donetsk and Luhansk People’s Republics in Ukraine’s Eastern Donbas region ordered an immediate evacuation of local civilians into Russia as fighting in the region escalates, traders hoped diplomacy could yet prevail. As Russia continue to amass troops on Ukraine’s doorstep, the US Secretary of State Anthony Blinken and Russian Foreign Minister Sergey Lavrov will meet face-to-face next week, reportedly under the condition that there will not be a Russian invasion.

Separately, OPEC+ sources on Friday said the group thinks a US/Iran deal to revive the 2015 nuclear pact, thus removing US restrictions on Iranian oil exports and allowing for the return of 1.3M barrels per day to global markets, is near. Despite the Iran news and near-term bearish technical picture following the break below key 2022 uptrend support, traders said markets should remain reasonably well support near highs amid continued expectations for tight global oil market conditions.