Ceasefire Prospects in the Middle East Deflate Oil Prices
A Downturn Against the Grain in a Euphoric Market
The decline is broad and consistent. TOTALENERGIES, a heavyweight in the sector, drops by 4.27%, while Galp Energia falls by 4.37% and Shell by 3.19%. Companies in the oilfield services sector are not spared: MAUREL ET PROM plunges 6.55%, North Atlantic Energy drops 3.93%, and ECOSLOPS collapses by 11.44%. Only TECHNIP ENERGIES manages to hold its ground (+0.88%).
The Energy sector, which shares eleven companies with the segment, also falls by 2.31%, indicating that pressure is affecting the entire chain. The macro context sheds light on this movement: following a surge in Brent to around 93 dollars due to the closure of the Strait of Hormuz and American threats against Iran, Donald Trump's overnight announcement of the cancellation of planned strikes and the possibility of a peace agreement by this weekend brought the barrel back to 89 dollars.
This geopolitical easing, combined with a 16.2% drop in the VIX to 18.62, benefits European indices but mechanically penalizes major oil companies whose valuations included a high-risk premium.
Technical Analysis: Temporary Correction or Trend Reversal?
The strict technical configuration of the sector remains ambivalent. The weighted RSI stands at 52.7, in a neutral zone, indicating neither overbought nor oversold conditions before the session. The weighted average price is below the 50-day moving average, a sign that the medium-term momentum has recently weakened, but it remains well above the 200-day moving average, indicating a still upward underlying trend. The sector MACD remains above its signal line, suggesting that the underlying momentum is not broken. Today's decline could thus be more akin to a purge of the recently accumulated geopolitical premium rather than a break in the cycle. The future path will largely depend on the outcome of the negotiations in the Gulf this weekend, as the evolution of Brent remains the dominant directional factor for the sector.
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