Crude oil has taken a decisive turn toward the bearish side of the ledger, and two forces are doing the pushing: easing tensions between the US and Iran, and rising OPEC production.

The selloff has been "pretty strong," according to the technical analysis published on TradingView under the symbol NYMEX_DL:CLZ2026 — the December 2026 contract for crude oil futures (agreements to buy oil at a set price on a future date). The driver isn't hard to find. President Trump signaled that further military strikes against Iran are unlikely for now, and that single political signal drained a lot of fear premium out of the market.

Why did the fear premium deflate?

The Strait of Hormuz (the narrow chokepoint between Iran and Oman through which a large share of the world's seaborne oil passes) was the worry. Traders feared that escalation could disrupt supply routes and send prices spiking. With strikes now off the table, at least temporarily, those fears of supply disruption through the Strait have receded. Less fear means less buying of oil as a hedge. Prices fall.

The second pressure point is supply itself. Higher OPEC production (OPEC being the group of major oil-exporting nations that coordinates output levels) is adding downward force to prices. When the cartel pumps more crude, the market tightens less, and the price logic turns simple: more barrels chasing the same demand means weaker prices.

What does the chart say?

The analysis, authored by the TradingView analyst writing under the name "ew-forecast" and signed Grega, uses Elliott Wave theory (a method that reads market moves as recurring wave patterns — five waves in the direction of the trend, three against it). On that reading, price now appears to be trading in wave five — the final leg of the decline that began from the October highs.

The whole drop from those October highs looks impulsive, meaning it moves in the clean, directional pattern typical of a genuine trend rather than random chop. But even impulses eventually face corrective recoveries. In plain terms: a trend doesn't fall forever in a straight line. Counter-trend bounces are part of the structure.

So some stabilization could arrive soon. The specific trigger to watch is a break above the upper line of the downward channel — the diagonal boundary that has contained the entire slide. Price escaping that line would be the first technical evidence that sellers are losing their grip.

Where's the ceiling on any bounce?

Here the analysis gets precise. If a recovery does take hold, the previous wave four area around $92–$95 would be important resistance — the zone where an earlier corrective leg stalled, and where sellers have a structural reason to return. That range is the line in the sand between a mere bounce and something more meaningful.

There's a second, quieter signal supporting the case for stabilization: a strong bullish divergence on the RSI (the Relative Strength Index, a momentum gauge that measures the speed of price changes). A bullish divergence appears when price keeps making new lows but the RSI does not. It suggests that selling momentum is weakening — the decline may still be printing lower numbers, but with less force behind each push.

What's the bottom line for the trade?

The framework is straightforward. Trend: bearish, driven by geopolitics de-escalating and OPEC supply rising. Structure: wave five in progress, which by Elliott Wave logic is the last leg down before a larger correction. Levels: watch the top of the downward channel for a breakout signal, then treat $92–$95 as the resistance that decides whether any rebound has legs.

The momentum evidence — that RSI divergence — hints the market may already be tiring of the downside. But as the analysis itself notes, weakness after the rally is the base case until price proves otherwise by clearing the channel. Traders watching this setup have a clear script: stabilization is possible, the bounce is tradable, and $92–$95 is where the story gets tested.