#Gate广场五月交易分享

# Oil Price Roller Coaster
Is the crude oil market playing you? Don’t worry! Fluctuating within the range with high sell-offs and low buy-ins is the key

These days, those of you speculating on crude oil are probably confused. On May 7th, influenced by optimistic expectations that the US and Iran were close to reaching a ceasefire memorandum, oil prices plummeted over 7% in a single day, with WTI briefly dropping below $90 per barrel. However, in the early morning of May 8th, the US military conducted airstrikes on Iran, and geopolitical risk premiums quickly returned, causing a short-term rebound above $95 per barrel. Many were caught in a double squeeze of long and short positions. In this situation, Little God of Wealth believes everyone should stay calm. The so-called “news is just to match the market,” don’t chase news-driven trades. When the US-Iran conflict reaches a stalemate, crude oil is likely to fluctuate broadly between $90 and $100, so everyone should do high sell-offs and low buy-ins, and believe that losses can be avoided.

This broad fluctuation pattern stems from the tug-of-war between fundamentals supply and demand and geopolitical factors: on one hand, global crude oil inventories are at an eight-year low (EIA data shows inventories are continuously decreasing), supporting the oil price bottom; on the other hand, uncertainties in the US-Iran conflict, such as the shipping risks in the Strait of Hormuz, keep pushing the premium upper limit higher, forming a clear fluctuation range of $90-$100.

Core Principles of the High Sell-Off and Low Buy-In Strategy

Within the $90-$100 fluctuation range, high sell-offs and low buy-ins are the key to efficient crude oil trading. The core logic is:

Support at the low end ($90): When prices fall to around $90, fundamental factors (such as low inventories and OPEC+ production cuts) provide strong support. Buy long positions at this point, with lower risk, because even if geopolitical tensions ease, supply tightness will limit downside.

Resistance at the high end ($100): When prices approach $100, geopolitical risk premiums face downward pressure (such as ceasefire negotiations restarting), coupled with high oil prices suppressing demand (e.g., reduced aviation fuel consumption), forming natural resistance. At this point, selling or shorting can lock in profits.

Range Stability: The current fluctuation range is defined by a balance between geopolitical events and fundamentals. The “stalemate” mode of the US-Iran conflict (such as alternating ceasefire expectations and military actions) ensures the range is not easily broken in the short term, providing an operational window for the strategy.

Operational Execution and Risk Management

Implementing the high sell-off and low buy-in strategy requires following these steps:

Entry Timing: Monitor real-time data and news (such as US-Iran negotiations progress, EIA inventory reports). When prices hit around $90 (±$1), gradually build long positions; when approaching $100 (±$1), gradually reduce or switch to short positions.

Position Control: It is recommended that single-trade positions do not exceed 10% of total funds to diversify risk. Confirm entry points with technical indicators (such as RSI oversold/overbought signals).

Stop-Loss and Take-Profit Settings: Set stop-loss for longs below $88 (to prevent breakdown risk), with take-profit targets at $98-$99; for shorts, set stop-loss above $101, with take-profit at $92-$93.

Dynamic Adjustment: If geopolitical events escalate (such as strait blockades), the range may shift upward to $95-$105; if a ceasefire agreement is reached, the range may shift downward to $85-$95. Strategies should be flexibly revised accordingly.

Potential Risks and Countermeasures

Although the fluctuation range offers profit opportunities, beware of black swan events:

Upside Risks: Out-of-control US-Iran conflict causing supply disruptions, breaking through $100. The strategy should promptly cut losses and switch to trend-following.

Downside Risks: Signs of global recession (such as Federal Reserve rate hikes) weakening demand, causing prices to fall below $90. Reduce positions and observe.

Macroeconomic Factors: Pay attention to the US dollar index (a strong dollar suppresses oil prices), non-farm payroll data, etc., which may indirectly impact the crude oil market through liquidity changes. It is recommended to combine macroeconomic calendar data to optimize trading timing.