Oil recovered slightly today after plunging by more than 7% on Monday when Brent and WTI each slid roughly 7%, retreating from October's six-month highs. As recently as late last week, Brent traded near $116, so this pullback was one of the sharpest in months.

There are two main drivers. Hope of US-Iran negotiations rose after comments by Iran's president about expanded authorities and Trump's hints at progress. At the same time, the physical market showed signs of weakness. Recall that in July, prices collapsed after a temporary truce allowed tankers to transit the Strait of Hormuz. The current picture is similar but less dramatic. Saudi Arabia, the UAE, Iraq, and Kuwait increased combined exports in October by about 10% to more than 15 million barrels per day — effectively back to pre-conflict levels — while Iranian exports remain effectively halted.

One key difference from June: then, very large VLCC cargoes hit the market at once. Today, the export increase is more gradual, so this looks more like the onset of oversupply than a sudden glut. Still, previous hopes for talks have failed to materialize, so caution is warranted even though signals now appear to be coming from both sides.

Implications for other markets are straightforward. Cheaper oil eases inflationary pressures and reduces central bank headaches, which helps gold. The metal rose by 1.9% on Monday. Politically, fuel is a core election issue in the US, and Trump has promised lower energy prices after the vote, which adds another layer to the market narrative.

I expect downward pressure on oil to persist over the coming sessions while Gulf exports remain near pre-conflict volumes. A sharp rebound is possible only if talks collapse — and note reports in the NYT that the US and Israel have contingency plans for strikes on Iran after the election.

As for technical analysis, for oil buyers, the immediate task is to overcome the resistance level of $98. That would pave the way for a push toward $101, above which further progress becomes more difficult. A higher target sits around $105. On the downside, bears will try to take control at $95. A break below that level would inflict serious damage to bulls and could drive oil down to $92, with a further target near $89.