West Texas Intermediate (WTI) US Oil rises 3.20% on Monday and trades around $78.80 at the time of writing. Oil prices retain strong daily gains, supported by uncertainty surrounding the reopening of the Strait of Hormuz and persistent tensions in the Middle East.
The Strait of Hormuz remains at the center of market attention due to its strategic importance for global energy supplies. Around 20% of global energy supply passes through the waterway, making the Oil market particularly sensitive to the risk of prolonged disruptions to shipping.
Iran has reiterated several conditions before agreeing to fully reopen the strait. According to Al Jazeera, Mohammad Bagher Zolghadr, Secretary of Iran’s Supreme National Security Council, demanded, among other conditions, an end to the US naval blockade and the withdrawal of US naval and air forces from around Iran.
Tehran is also demanding compensation for damage caused by recent conflicts, the lifting of sanctions and the unconditional release of frozen Iranian assets. These demands currently reduce visibility over a rapid normalization of shipping and help maintain a risk premium in WTI prices.
Meanwhile, talks with Oman over establishing a safe shipping route through the Strait of Hormuz appear to be progressing. However, the absence of an agreement on a full reopening keeps investors cautious about the risk of a prolonged disruption to Oil flows.
Regional tensions are not limited to the Strait of Hormuz. Yemen’s Iran-backed Houthis have claimed responsibility for a drone attack on a Saudi Aramco refinery in Jazan, Saudi Arabia. The latest attack on major energy infrastructure reinforces concerns about the security of Oil supplies in the region.
Against this backdrop, developments in negotiations over the Strait of Hormuz remain a key driver for WTI. Signs of an agreement allowing a sustained resumption of shipping could reduce the geopolitical risk premium embedded in Oil prices, while a prolonged stalemate or further regional escalation could continue to support Crude Oil.
Oil supported as Hormuz uncertainty keeps CTAs long and US supply response builds
According to TD Securities, trend-following accounts have shifted back to the buy side, with “CTAs have turned buyers of crude oil and heating oil as a Hormuz deal remains elusive.” The bank notes that “CTAs are starting the week as buyers across WTI and Brent crude oil, along with heating oil,” as geopolitical risks remain elevated. TD highlights that a “Hormuz deal remains elusive,” while “the Houthis continued strikes on Saudi energy infrastructure, flows via Hormuz and Bab el-Mandeb remain critically choked, and Russian exports and refining remains subdued amid continued Ukrainian attacks,” all of which are helping to underpin prices and CTA length.
ING similarly points to persistent geopolitical risk, stating that “oil prices remain supported by uncertainty surrounding the Strait of Hormuz.” The bank notes that, while US President Donald Trump said Washington is “semi-negotiating” with Iran, suggesting a focus on economic pressure rather than military escalation, “significant hurdles remain before any broader agreement is reached.” ING adds that “reports indicate that Iran and Oman are nearing an agreement on a shipping route through Hormuz, though a full reopening of the waterway is still likely to depend on progress in US-Iran talks.”
Despite the supportive backdrop, ING observes that speculative positioning has turned more cautious, with “money managers cut net long positions in NYMEX WTI by 7,257 lots to 101,050 lots, while net longs in ICE Brent fell by 20,361 lots to 164,722 lots, marking a second consecutive weekly decline.” On the fundamental side, ING notes that “US oil activity has continued to recover, with Baker Hughes data showing that the oil rig count rose by three to 454, the highest level since May 2025.” At the same time, “US crude exports remain elevated as buyers seek alternative supply sources, although much of the recent increase has been supported by inventory drawdowns rather than stronger production growth.”
WTI US Oil technical analysis
In the one-hour chart, WTI US Oil trades at $78.69. The near-term tone is neutral-to-bullish as price holds above the 100-hour simple moving average (SMA) at roughly $76.24, but remains capped just beneath the 200-hour SMA around $78.77 and the downward resistance trend line near $79.03. The Relative Strength Index (RSI) sits in bullish territory near 64, suggesting upward momentum persists but is running into this nearby supply band.
On the topside, immediate resistance is clustered between the descending trend-line barrier at about $79.03 and the 200-hour SMA at $78.77; a sustained break above this zone would open the way for a more convincing recovery. On the downside, initial support is provided by the 100-hour SMA near $76.24, with a loss of this floor likely signaling fading bullish pressure and a deeper correction within the broader range.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
