WTI oil prices have fallen below $60 after reaching high levels in recent months. The rise was initially fueled by concerns about US-Iran tensions, but prices have dropped as those geopolitical risks eased following softer comments from US President Trump.

Current Market Trading

WTI is now trading around $59.26 per barrel, down 1.40%. The recent arrest of a tanker linked to Venezuela by US forces has provided some cushion for prices, but fears of oversupply continue to loom. A strong US Dollar is also putting pressure on prices, making oil more expensive for buyers around the world. Technically, the market appears to be losing momentum, with WTI unable to stay above the key $60 mark. The MACD indicator remains positive, but the RSI is at 52, suggesting that the upward momentum is fading. Immediate support for WTI is in the $59.00–$58.00 range; if it drops below this, prices may fall to $56.00-$55.00. The next resistance level is at $60.00, and for prices to rise, they need to surpass the 100-day SMA. Reflecting back on 2025, we can see a shift in market sentiment. Back then, WTI struggled to stay above $60 due to lessening geopolitical risks. However, as of January 16, 2026, prices are stable around $82 per barrel. The dynamics have changed from oversupply fears to worries about a tighter market.

Market Dynamics in 2025

In 2025, the market saw prices drop as the US-Iran risk premium faded. Currently, persistent low-level geopolitical risks in the Red Sea have rerouted tanker traffic, creating more support for prices. This indicates that price dips could be less severe now than before. The oversupply concerns that were prevalent last year are being effectively managed by OPEC+. In late 2025, OPEC+ decided to extend production cuts of 2.2 million barrels per day into the first quarter of 2026, providing strong support for prices. This careful management of supply is a major reason for the lack of bearish pressure we see today. Recent inventory reports challenge the old oversupply narrative. According to the latest EIA report for the week ending January 9th, there was an unexpected draw of 2.5 million barrels in crude inventories, indicating strong demand. This suggests a tighter market than many expected, contributing to a bullish sentiment. However, a strong US Dollar remains a hurdle. The Dollar Index (DXY) is currently around a robust 104, which makes dollar-priced crude more expensive for foreign buyers. This situation limits potential price increases and prevents a stronger breakout. Given all this, traders should change their strategies from the “fade the rally” approach used in 2025. Now, the $80 mark serves as a key psychological and technical support level, much like the previous $58-$59 range. Strategies such as selling cash-secured puts with a strike near $78 or buying call spreads could offer bullish exposure while managing risks from the strong dollar. Traders should keep an eye on upcoming EIA reports and any statements from OPEC+ members for signs of changes in fundamentals. The market is pricing in a tight supply, making it sensitive to data that could signal weakening demand. Therefore, any unexpected increase in inventories might trigger a quick but likely temporary pullback. Create your live VT Markets account and start trading now.

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