Key Technical Levels
WTI struggled to extend gains beyond the 61.8% Fibonacci retracement at $98.90, after rebounding from below $76.00. Prices stayed above the rising 200-period SMA on the 4-hour chart near $85.70. The MACD histogram turned positive, with the MACD line moving back towards zero. RSI was around 56, above 50 and below overbought levels. Resistance was flagged at $98.90, with a move higher pointing to $100.00. Support levels were noted at $94.62 and $90.33, with the 200-period SMA offering further support. The technical analysis was produced with help from an AI tool.Options Strategy Considerations
We are seeing West Texas Intermediate crude oil prices pull back toward $91.50 after failing to hold gains above $96 last week. This current softness comes as the International Energy Agency (IEA) just slightly lowered its global demand forecast for the second half of the year, citing slowing industrial output. The market is also digesting the latest OPEC+ decision to maintain current production quotas, leaving supply tight but stable. This price action is very similar to the pattern we observed back in 2025 when WTI also retreated sharply from the $100 level. Back then, the trigger was diplomatic efforts to reopen the Strait of Hormuz, which eased supply disruption fears that had pushed prices higher. That event last year showed how quickly geopolitical premiums can evaporate from the market on signs of de-escalation. The Strait of Hormuz remains the world’s most critical oil chokepoint, with roughly 21 million barrels per day passing through it, accounting for over 20% of global daily consumption. We see that any hint of instability in that region adds a quick $5 to $10 risk premium to the price of oil. This sensitivity means traders must watch naval patrol reports and regional diplomatic statements as closely as inventory data. Given the underlying bullish trend, this dip could be an opportunity to enter long positions. Buying call options with a strike price around $95 or $100 offers a defined-risk way to bet on a rebound in the coming weeks. We are watching for price to stabilize above the key support level in the low $90s before adding exposure. For those concerned about downside risk from weakening demand, buying put options below $90 can serve as a hedge for existing long positions. The recent IEA report gives credibility to a scenario where prices could fall further if economic data continues to soften. This strategy protects against a deeper correction while maintaining upside potential. The recent headlines have caused implied volatility to increase, making options more expensive for both buyers and sellers. This suggests that option spreads, such as bull call spreads, could be a cost-effective strategy to position for a recovery while capping both risk and potential reward. We should expect this heightened volatility to persist until there is a clearer signal on either global demand or supply stability. Create your live VT Markets account and start trading now.
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