WTI crude fell about 9% on Monday, dropping back below $100 a barrel and testing $90 after trading above $101 early on. It then hit an intraday low near $84 before recovering towards $90, creating a roughly $17 high-to-low range. A post said the US and Iran had held talks and that strikes on Iranian power plants were delayed for five days. This replaced a 48-hour ultimatum that threatened action if the Strait of Hormuz was not reopened.

Geopolitical Headlines Drive Volatility

Tehran denied that talks were taking place. Iran’s Islamic Revolutionary Guard Corps said it would target regional energy and desalination sites if Iranian power plants were attacked. The IEA’s 400-million-barrel reserve release, announced on 11 March, is starting to arrive, with the US providing 172 million barrels from the SPR over about 120 days. Goldman Sachs set WTI forecasts at $98 for March and $105 for April, with Hormuz flows at about 5% of normal volume. On a 5-minute chart, WTI traded at $89.29, below a 200-period EMA near $93.40. Support levels were cited at $88.75, $86.50 and $85.70, with resistance at $90.00, $90.50 and $91.00. WTI is a US crude benchmark from the Cushing hub. Prices are driven by supply and demand, OPEC decisions, the US dollar, and weekly API and EIA inventory reports, which are within 1% of each other 75% of the time.

How To Read The Current Setup

We remember the massive intraday volatility this time last year, when WTI swung nearly $17 in a single session. That period in March 2025 was defined by conflicting geopolitical headlines concerning the US and Iran, which created a chaotic and unpredictable market for crude oil. The uncertainty around the Strait of Hormuz kept traders on edge. Today, the market is far calmer, with WTI currently trading near $82.50 a barrel. Geopolitical risk has eased significantly, with recent data showing the Strait of Hormuz operating at over 95% of its normal volume for the past six months. This is a stark contrast to the crisis-level 5% flow rates we saw during the peak tensions in 2025. On the supply side, this week’s EIA report showed a surprise inventory build of 2.1 million barrels, hinting at softer than expected demand. This comes as efforts to refill the Strategic Petroleum Reserve, which was heavily drawn down during the 2025 coordinated release, have been slow and methodical. OPEC+ has also held its production quotas steady for the second consecutive meeting, signaling a desire for stability. Unlike last year when Fed officials were considering rate cuts, the focus now is on managing stubborn inflation. Current market pricing, according to the CME FedWatch Tool, implies a 70% probability of a 25-basis-point rate hike in May. This is strengthening the US Dollar and acting as a headwind for crude prices. Given this backdrop of stable supply and a hawkish central bank, selling rallies towards the $85 resistance level looks like a prudent strategy for the coming weeks. The extreme volatility of 2025 is not our current reality, making range-bound strategies more attractive. For those wanting to define their risk, buying puts with a strike price near $80 could offer protection against a break lower. We are closely watching the $78 per barrel level as key support, a zone that has held firm twice since the beginning of the year. A sustained break above the $85-$86 area would be needed to signal a meaningful shift in market momentum. For now, the path of least resistance appears to be sideways to slightly lower. Create your live VT Markets account and start trading now.

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