Oil prices fall below $90, but the market isn't panicking: Is this time really about geopolitical risks being the main factor?

WTI drops below $90, and Brent also follows downward. Normally, when there’s a disturbance in geopolitical situations, the oil market should react with a sharp surge. But this time, the market’s response seems a bit “overly calm”: after the White House denied reaching a memorandum of understanding with Iran, oil prices didn’t immediately spike with a big bullish candle as in the past. Instead, attention shifted to a more immediate issue — high interest rates are suppressing demand.

This is quite interesting. Previously, oil prices were most afraid of supply disruptions. Now, the market is worried that “demand might not hold up.” High interest rates act like a slow knife, not cutting oil prices all at once, but gradually weakening consumption, transportation, and industrial activity. In other words, geopolitical risks are still present, but the market has learned: don’t just focus on the Middle East, also watch the Federal Reserve.

However, oil prices don’t fall endlessly. Low inventories serve as their “safety cushion.” Low stock levels mean that if there’s a small supply-side accident, prices can quickly bounce back. So, in the short term, oil prices are more like walking a tightrope between “support below and pressure above.” The market isn’t betting on a big plunge, but on whether demand suppression is stronger or low inventories can provide more support. #WTI原油失守90美元