Crude oil futures recovered in early trade on Wednesday after witnessing a sharp collapse in the previous session. On the Multi Commodity Exchange of India (MCX), crude oil futures were trading around Rs 7,640 per barrel, up Rs 219 or 2.95%, indicating a modest rebound following the heavy sell-off seen on Tuesday.
The recovery comes after crude prices plunged nearly 18% in the previous session, when markets rapidly unwound the geopolitical risk premium following comments from Donald Trump suggesting the conflict involving Iran, Israel, and the United States could end sooner than expected.
Global crude prices stabilise
Globally, WTI crude is currently trading around $83–$84 per barrel, while Brent crude is hovering near $87–$88 per barrel. These levels represent a sharp pullback from the recent spike toward $118–$120 per barrel, which had been triggered by fears of supply disruptions around the Strait of Hormuz.
Despite the correction, oil prices remain significantly higher than pre-conflict levels earlier in 2026 when crude was trading in the $60–$70 range.
Technical indicators suggest stabilisation
Technical analysis suggests that the market may be entering a consolidation phase after the sharp decline. A retracement analysis of the earlier rally from $54.98 indicates a key support level near $79.77, representing the 61.8% Fibonacci retracement.
A spinning-top candle formation observed in the previous session signals weakening bearish momentum. Analysts suggest the market may remain range-bound in the near term, potentially testing resistance around $87.33 before attempting a move toward $94.90.
Wave pattern indicates possible continuation
Wave structure analysis suggests the broader uptrend that began from $54.98 may still be incomplete. The sharp fall from the recent high near $119.40 is being interpreted by some analysts as a corrective wave B, which could terminate around $79.77 or $63.99.
If the corrective phase completes, a potential wave C could resume the broader uptrend, possibly targeting the previous high near $119.
RSI divergence supports rebound possibility
On the hourly chart, the decline from $119.48 appears to have formed a five-wave structure, typically associated with the completion of a downward move.
In addition, the Relative Strength Index (RSI) has shown bullish divergence, suggesting selling pressure may be easing. Projection analysis indicates a potential near-term trading range of $78.07–$86.91, aligning with the support levels identified on the daily chart.
Market remains headline-driven
Oil markets continue to be driven primarily by geopolitical developments and policy signals. Updates regarding potential strategic reserve releases, sanctions discussions, and developments around the Strait of Hormuz remain key factors influencing price direction.
Given the ongoing uncertainty surrounding the Middle East conflict, analysts expect crude oil markets to remain highly volatile in the coming sessions.