Oil just dropped ~20%… then bounced back in a day. What’s actually going on?

So oil basically dumped hard on ceasefire optimism, then immediately reversed once that narrative started falling apart.

Now it’s back near \\\~$98 after a \\\~4% move in a single session.

At first glance, it just looks like volatility. But I don’t think this is a normal supply/demand story.

This feels way more like a headline-driven market.

The key issue right now is the Strait of Hormuz. It handles a huge portion of global oil shipments (around 20%), and traffic is still heavily constrained. Even without an actual shortage, the risk of disruption is enough for markets to reprice quickly.

What’s interesting is how fast sentiment flipped.

One day: “ceasefire = lower oil”

Next day: “tensions back = spike”

That kind of reaction usually means the market isn’t confident. It’s just reacting.

And when that happens, you get moves driven more by positioning (short covering, panic exits, etc.) than by real structural changes.

So now the big question:

Is this the start of a sustained move higher?

Or just another reaction that fades once the narrative shifts again?

Personally, it feels like oil is trading scenarios, not fundamentals right now.

Curious how you guys are looking at it, do you see this as strength, or just noise?