Oil prices fall below $90! Is the Middle East "powder keg" suddenly falling silent? The real BOSS is actually the Federal Reserve!

On May 28th, WTI crude oil suddenly dropped below $90, and Brent also "plunged," leaving many investors confused: Isn't it said every day that the Middle East is about to blow up? Why are oil prices melting away like ice in bubble tea?
The reason is simple— the market has now entered a "wolf is coming" mode.
Although the White House denies that the U.S. and Iran have signed a memorandum of understanding, the market has already implicitly accepted: both sides are secretly negotiating. Just like a couple saying "we're just friends," but their social media already shows off matching coffee cups.
What are investors most afraid of? Not conflict, but "disappointment of conflict expectations."
Previously, oil prices surged because of the story that "the Middle East might escalate into a full-scale conflict." But now everyone suddenly realizes: neither Iran nor the U.S. wants to really throw down. The U.S. fears inflation will soar again, Iran fears its economy will be completely starved of oxygen, so both sides have entered a classic mode—"arguing while negotiating."
What does this mean?
It means the Strait of Hormuz is unlikely to be truly closed in the short term, and oil supply risks are beginning to cool down.
But here’s the problem: why haven't oil prices crashed directly?
Because inventories are too low.
Currently, global crude oil inventories are like a wallet at the end of the month—looking like it can hold out, but actually almost empty. Especially since the U.S. strategic reserves have been heavily tapped in recent years, once hurricanes, geopolitical frictions, or production cuts escalate, oil prices are prone to "spike in place."
So now the market is particularly conflicted:
On one side, high interest rates suppress demand.
U.S. consumers are already hit by the "double whammy" of high oil prices and high interest rates, and are almost entering "fuel-saving mode."
On the other side, supply remains tight.
OPEC+ is still cutting production, and Russia's exports are unstable.
So what does crude oil look like now?
Like someone about to jump into water but there's no pool underneath—wanting to fall, but afraid to fall too hard.
In the short term, I lean toward:
Prices around $90 will repeatedly tug back and forth.
Because the short positions are already crowded, but the real cause of a sharp crash—"demand collapse"—has not yet appeared.
The true factor that will decide the next move is actually two words:
Interest rate cuts.
If the Federal Reserve starts signaling rate cuts, commodities are likely to re-enter the "inflation trade," and oil prices could perform a "comeback" at any moment.
So don’t be fooled by today’s sharp decline; Wall Street is actually more anxious than retail investors right now.
After all, the biggest characteristic of crude oil is:
Just when you’re about to go short, it starts bouncing back.
Just when you’re about to chase the rally, it begins free-falling.
This market is even harder to predict than love. #WTI原油失守90美元