Today, oil has stabilized somewhat following a 3% drop yesterday. Brent is trading at around $95 per barrel, while WTI is at around $93 per barrel. Over the week, the American benchmark gained more than 6% as conflicting signals from negotiations brought back some of the military premium that optimism in May had erased.

The picture for the week is indicative. In early April, when the US and Iran agreed to a ceasefire, futures retreated about 20% from their peak. Then, the optimism surrounding negotiations continued to weigh on prices for several more weeks. Now, the pendulum has swung back: Hezbollah rejected the Lebanese ceasefire, strikes on Kuwait and Bahrain resumed, and an explosion at the oil export terminal in Oman at Mina al-Fahal — one of the few remaining operational points for shipping Middle Eastern oil — added nervousness, although operations at the terminal were later resumed. The market received enough reasons to restore part of the geopolitical premium.

Trump continues to assure that a deal is near. Yesterday, he posted on social media that he is "in the midst of final negotiations" with Iran. When asked about Hezbollah's rejection of the Lebanese ceasefire, he replied, "They didn't reject me" and stated that they called him to discuss a ceasefire. Iranian Foreign Minister Araghchi publicly stated the day before that there has been no significant progress. The market hears both versions — and prefers to remain cautious.

Recently, conflicting statements have no longer been a serious negative factor — they merely restrain excessive price growth. Traders are willing to partially remove the military premium on constructive headlines, but until there is real progress on the ground, it is premature to talk about the disappearance of the risk premium.

Tonight, the May Non-Farm Payrolls will be released — and it risks adding another price impulse to oil. If the employment data is strong, expectations for a Federal Reserve rate hike will increase — the dollar will strengthen, which traditionally puts pressure on dollar-denominated commodities. If the data is weak, the inflation narrative may weaken slightly, and oil could get a slight breather. In any case, the main variable for the oil market remains unchanged — the Strait of Hormuz and the fate of the negotiations.

Regarding the current technical picture for oil, buyers need to reclaim the nearest resistance at $100.40. This will allow targeting $106.80, above which it will be quite challenging to break through. The furthest target will be the $110.80 area. In the event of a drop in oil, bears will attempt to take control at $92.54. If this is achieved, breaking the range would deliver a serious blow to the bulls' positions and drive oil down to a low of $86.50, with the potential to approach $81.40.